PH Construction

Construction & Building Technologies
Philippines Market Study
MARCH 2017
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EU Business Avenues in South East Asia
Central Management Unit
Philippines Market Study
March 2017
Submitted to the European Commission by

Cardno Emerging Markets, Belgium s.a.
on 17 March 2017
Construction & Building Technologies – Philippines Market Study - Page 3 of 90

Table of Contents
LIST OF ABBREVIATIONS ........................................................................................................................................ 7
1. EXECUTIVE SUMMARY ......................................................................................................................................... 9
2. WHAT ARE THE CHARACTERISTICS OF THE PHILIPPINES? ........................................................................ 13

2.1. POLITICAL OVERVIEW ............................................................................................................................ 14
2.2. ECONOMIC OVERVIEW ........................................................................................................................... 15
2.3. TRADE OVERVIEW ................................................................................................................................. 16
2.4. M ARKET ACCESS .................................................................................................................................. 17
2.5. BUSINESS AND COMPETITIVE ENVIRONMENT........................................................................................... 18
3. MARKET OVERVIEW & EU ENTRY OPPORTUNITIES IN THE PHILIPPINES ................................................. 20

3.1 THE FILIPINO CONSTRUCTION AND BUILDING TECHNOLOGY SECTOR ........................................................ 20
3.1.1 The Filipino Construction Industry .................................................................................................. 20
3.1.2 The Filipino Mining Industry ............................................................................................................ 24
3.1.3 Key Associations ............................................................................................................................ 28
3.1.4 Entry Strategies .............................................................................................................................. 29
3.1.5 Challenges & Entry Barriers ........................................................................................................... 30
3.2 CONSTRUCTION M ACHINERY ................................................................................................................... 31
3.2.1 Market Overview ............................................................................................................................. 31
3.2.2 EU Entry Opportunities ................................................................................................................... 40
3.3 BUILDING M ATERIALS AND BUILDING INSTALLATION ................................................................................ 44
3.3.1 Market Overview ............................................................................................................................. 44
3.4 SMART AND GREEN BUILDING ................................................................................................................. 55
3.4.1 Market Overview ............................................................................................................................. 55
3.5 SMART GRIDS ........................................................................................................................................ 63
3.5.1 Market Overview ............................................................................................................................. 63
4. REGULATIONS ..................................................................................................................................................... 67
4.1 GENERAL IMPORT PROCEDURES ............................................................................................................. 67
4.2 M ARKING AND LABELLING REQUIREMENTS .............................................................................................. 69
4.3 RULES AND REGULATIONS FOR CONSTRUCTION ACTIVITIES AND M ACHINERY ........................................... 70
4.4 PHILIPPINE GREEN BUILDING (GB) CODE ................................................................................................ 71
4.5 GOVERNMENT TENDERS ......................................................................................................................... 74
Construction & Building Technologies - Philippines Market Study - Page 4 of 90

5. ANNEX .................................................................................................................................................................. 75
5.1 LIST OF USEFUL CONTACTS .................................................................................................................... 75
5.2 STARTING A BUSINESS IN THE PHILIPPINES .............................................................................................. 77
5.3 USEFUL STATISTICS ............................................................................................................................... 81
5.4 BIBLIOGRAPHY ....................................................................................................................................... 87

Lists of Figures and Tables
Figure 1: Map of the Philippines ................................................................................................. 13

Figure 2: Percentage Distribution of Value of All Mining and Quarrying Establishments ........... 26
Figure 3: Employment in Mining ................................................................................................. 27
Figure 4: Excavators Account for 50% of Total Sales of Building Equipment ............................ 37
Figure 5: PhilGBC Promotes Green Building Practices.............................................................. 56
Figure 6: Minimum Building/ Occupancy TGFA ......................................................................... 72
Table 1: Ease of Doing Business in Singapore .......................................................................... 18

Table 2: Non-Residential Construction Statistics from Approved Building Permits for
Year 2010 to 2015 ....................................................................................................... 22
Table 3: Residential Construction Statistics from Approved Building Permits for Year 2010
to 2015......................................................................................................................... 23
Table 4: Value of Imports of Construction Machinery ................................................................ 32
Table 5: Largest Trading Partners for Imports of Construction Machinery in 2015 .................... 32
Table 6: Example of Contractors / Developers Buyers of Construction Machinery in the
Philippines ................................................................................................................... 35
Table 7: Example of Mining Companies Buyers of Construction Machinery in the
Philippines ................................................................................................................... 36
Table 8: Value of Imports of HVAC Systems ............................................................................. 38
Table 9: Largest Trading Partners for Imports of HVAC Systems in 2015 ................................. 39
Table 10: Construction Materials Wholesale Price Index, Part 1 ............................................... 45
Table 11: Construction Materials Wholesale Price Index, Part 2 ............................................... 46
Table 12: Examples of Buyers of Construction Materials in the Philippines ............................... 49
Table 13: Minimum Building/ Occupancy TGFA ........................................................................ 55
Table 14: Imports of earths and stone; plastering materials, lime and cement into the
Philippines.................................................................................................................. 81
Table 15: Exports of earths and stone; plastering materials, lime and cement from the
Philippines.................................................................................................................. 81
Table 16: Imports of Wood and articles of wood; wood charcoal into the Philippines ................ 82
Table 17: Exports of Wood and articles of wood; wood charcoal from the Philippines .............. 82
Table 18: Imports of Articles of stone, plaster, cement, asbestos, mica or similar materials
into the Philippines ..................................................................................................... 83
Table 19: Exports of Articles of stone, plaster, cement, asbestos, mica or similar materials
from the Philippines ................................................................................................... 83
Table 20: Imports of Ceramic products into the Philippines ....................................................... 84
Table 21: Exports of Ceramic products from the Philippines...................................................... 84
Table 22: Imports of Glass and glassware into the Philippines .................................................. 85
Table 23: Exports of Glass and glassware from the Philippines ................................................ 85
Table 24: Imports of Iron and steel into the Philippines ............................................................. 86
Table 25: Exports of Iron and steel from the Philippines ............................................................ 86

List of abbreviations
ASEAN Association of Southeast Asian Nations
BOI Board of Investments
BOT Build-Operate-Transfer
BPO Business process outsourcing
BPS Bureau of Philippine Standards
CAGR Compound annual growth rate
CBT Construction & Building Technology
CIAP Construction Industry Authority of the Philippines
CIF Cost, Insurance and Freight
DENR Department of Environment and Natural Resources
DPWH Department of Public Works and Highways

DTI Department of Trade and Industry
FTA Free-trade agreement
GB Code Green Building Code
GDP Gross Domestic Product
GNI Gross National Income
GSF Gross square feet
HVAC Heating, ventilation and air conditioning
ICT Information and communications technology
IFC International Finance Corporation
LED Light-emitting diode
LEED Leadership in Energy and Environmental Design
Meralco Manila Electric Company

MGB Mines and Geosciences Bureau
MSME Micro-Small and Medium Enterprises
NCR National Capital Region
NICCEP National Industry Cluster Capacity Enhancement Project
OTOP One-Town-One-Product
PCA Philippine Constructors Association
PEZA Philippine Economic Zone Authority
PNS Philippine National Standards

PSA Philippine Statistics Authority
SEC Securities and Exchange Commission,
SHGC Solar heat gain coefficient
SRI Solar reflectance index
TESDA Technical Education and Skills Development Authority
TGFA Total Gross Floor Area
TPP Trans Pacific Partnership
UNDP United Nations Development Programme
USGBC U.S. Green Building Council
UV Ultra Violet
VAT Value Added Tax
VLT Visible light transmittance
VOC Volatile organic compounds
WEF World Economic Forum

1. Executive Summary
The Philippines is currently one of the most dynamic economies in the South East Asia region,
with sound economic fundamentals and a globally recognised competitive workforce. Growth has
been robust in the past five years, registering an average of 6.2% from 2010-2015, significantly
higher than the average 4.5% annual growth in 2000-2009. The Philippines has the 12th largest
population in the world and is the fourth largest English-speaking country. It also has one of the
youngest populations in the world, with more than two-thirds under the age of 35.
Over the past few years, construction in the Philippines has been flourishing amid a climate of
political stability and upbeat business confidence, spurred by growth in overseas foreign worker
remittances, inbound investments into business process outsourcing, rising numbers of tourist
arrivals, and government spending on large- and small-scale infrastructure. Mining and
construction activities across the country are expected to grow in the next years, with the local
construction industry growing by more than half by 2020. This trend creates interesting
opportunities for European companies operating in the Construction & Building Technology (CBT)
sector.
Construction Machinery
The construction equipment industry in the Philippines was valued at PHP 20 billion
(EUR 376 million) in 2015.1 Machines, engines, and pumps are among the top imported
products in the country. In particular, the Philippines imports about 2,500 units of mixed-use
heavy equipment including excavators, pay-loaders, backhoes, road compacters and cranes
annually. In 2015, total imports of construction equipment in the Philippines amounted to more
than US$ 500 million. The value of imports has more than doubled from 2011 to 2015.
The Philippines’ industry is highly dependent on imports from countries such as China, Japan,
South Korea, the US and European countries such as Germany, Finland, and France.
Excavators account for about 50% of total sales of building equipment in the Philippines,
1
As of 26 January 2017, 1 US$ is equivalent to 49.7 PHP. Source: www.xe.com

while pay loaders, backhoes, road compacters and cranes, among others, account for the
remaining share.
Building Materials and Building Installation
The Philippines is heavily dependent on imported building and construction materials, with high
demand across the sector. Basic materials such as cement, aggregates, reinforcing steel bars,
galvanised iron sheeting and lumber are imported in large quantities, primarily because of
shortfalls in local production and its comparatively high cost. Demand of construction
materials (such as steel and other metals), surge periodically as a consequence of natural
disasters. As the local market is very price-sensitive, construction materials are generally
imported from neighbouring countries, especially China and Vietnam. Opportunities for
European companies centre around more niche areas such as green materials and materials
developed to resist natural disasters.
Smart and Green Building
Demand for sustainable construction products and energy saving materials is growing.
Local building companies are showing more interest in smart buildings, future-proof homes and
energy saving innovations, as well as supporting products such as pre-cast concrete and
polyurethane foam insulation panels. More than 200 buildings have registered since 2006 in
leading green building rating systems such as the Leadership in Energy and Environmental
Design (LEED). The landmark national development in the industry was the launching and
implementation in 2015 of the Philippine Green Building Code, also referred to as the GB Code.
Prefabricated homes have also found their way into the Philippine market as their costs are
significantly less than conventional building construction, in addition to being low wastage and
environmentally friendly. The next frontiers for green building in the Philippines are the creation
of smart and green cities.

Smart Grids
According to a new report release by Northeast Group, the South East Asia region is expected to
invest US$ 24.6 billion in smart grid infrastructure between 2016 and 2026. Even though smart
grid technology is still at an initial stage in the Philippines, the market is currently growing steadily.
By 2024, the Philippines alone is set to invest US$ 2.1 billion in smart meters, distribution
automation, home energy management, information technology and other smart grid market
segments.
Opportunities
Growth of Mining and Construction Activities
The Philippines’ Construction and Building Technology sector is deeply connected to the mining
and construction industries, from which the demand for machinery, construction materials, and
green building originates. The local construction industry was valued at US$ 30.2 billion and it is
forecasted to grow to US$ 47 billion by 2020, buoyed by rapid growth of the economy, tourism,
population growth, and increased infrastructure spending. The Philippines is also ranked top five
in the world for overall mineral reserves, and natural resources support a thriving mining industry.
Machines and Materials Resistant to Natural Disasters
The Philippines has a long history of natural calamities such as earthquakes, typhoons and
flooding. Consequently, developers prefer “disaster-quality” materials, which differ from cheaper
mass-produced materials coming out of factories in China or India. European producers offering
high-quality technology and material can find interesting opportunities in the Philippines.
Energy Saving Technologies
The country has some of the highest energy costs in the world. This created demand for
companies focusing on energy saving products, ranging from low-consumption LED lights, to
appliances that monitor and regulate energy usage. The government of the Philippines is also
encouraging the trend by introducing new regulations.

High-Quality Products
Sectors such as construction materials are markedly price sensitive in the Philippines, and
European companies might experience difficulties competing with producers from China and
other Asian countries. However, European products are generally perceived to be safer and of
higher quality. European companies are advised to bank on these factors in order to justify higher
prices.
Environmental Regulation
The GB Code, was launched June 2015, in order to improve the efficiency of buildings through a
framework of standards addressing the entire building’s life cycle, including efficient use of
materials, site selection, planning, design, construction, use, occupancy, operation and
maintenance. This code, along with other initiatives and regulations, is creating demand for
greener products in the Philippines.
Online Channel
E-commerce is growing in the Philippines. The Department of Trade and Industry (DTI) has
recently reaffirmed its commitment to facilitating the growth in the e-Commerce market.
The e-commerce market is set to contribute to 25% of the country’s gross domestic product by
2020.

2. What are the characteristics of the Philippines?
The Republic of the Philippines is a sovereign

island country in South East Asia situated in the
western Pacific Ocean. It has 7,107 islands
spanning more than 300,000 km2 of territory. It is
divided into three island groups: Luzon, Visayas,
and Mindanao. The climate of the Philippines is
tropical and maritime, characterised by relatively
high temperature, high humidity and abundant
rainfall.
The country has an estimated population of over

100 million and a recorded GDP of US$ 310 billion
in 2016. The major industries in the Philippines
include manufacturing, business process
outsourcing, construction and infrastructure.
The Philippines is among the fastest-growing

economies in South East Asia, with upgrades to
sovereign investment ratings confirming
improvements in the country’s macroeconomic
fundamentals. The country has a mixed economic
system which includes a variety of private freedom
combined with centralised economic planning and
government regulation.
The country is composed of a unique blend of

Malay, Chinese, Spanish, American and Arab Figure 1: Map of the Philippines
Source: CIA
ethnic groups. More than 100 cultural minority
groups are scattered throughout the country. The Philippines lists Filipino and English as its

official languages while Spanish, Chinese, Malay, Japanese, Tamil and Arabic languages are
also used in the country.
2.1. Political Overview
The Philippines is a republic with a presidential form of government wherein power is equally
divided among its three branches: executive, legislative, and judicial. The executive branch is
headed by the President, who serves as the Chief of State and Head of Government.
The legislative branch is the bicameral congress composed of members of the Senate and the
House of Representatives while the judicial branch is headed by the Chief Justice.
The Constitution of the Philippines is the highest law of the land. The Constitution currently
in effect was proclaimed on 2nd February, 1987 and popularly known as the 1987 Constitution.
There are a number of political parties in the country’s political system with different ideologies.
With this multi-party system, no one party often has a chance of gaining power alone. Thus,
elected officers work with each other to form coalition of governments. Currently there are two
types of parties in the Philippines, the Major Parties, traditional political parties, and Minor Parties
or Party-list Organisations, who bank on the party-list system to win Congressional Seats.
In May 2016, a national election for the executive and legislative positions took place in the
country where a total of 18,083 positions were at stake. It was Rodrigo Duterte from the Partido
Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban) Party who won the Presidency and became
the 16th President of the Philippines, succeeding Benigno S. Aquino III from the Liberal Party.

2.2. Economic Overview
The Philippines’ emergence as a growth leader has been building gradually since the 1990s,
following a long period of low growth and political upheaval. The country’s GDP growth for 2017
is projected at 6.2%. The Philippines is classified as a low middle income nation with a GNI per
capita of US$ 3,540.
The country’s service sector represents 58.8% of
The Philippine government has pursued its GDP and employs more than half of its
legislative reforms to enhance the workforce. The major sections of this sector include
entrepreneurial environment and develop a trade and repair (motor vehicles), real estate,
more vibrant private sector.
transportation and communication. Its industrial
sector contributes to 30.9% of its GDP and employs
about 15% of the country’s workforce. Industrial food processing is among the Philippines’ main
manufacturing activities along with the production of cement, glass, chemical products and
fertilisers, iron, steel and refined oil products.
The agricultural sector in the country employs about 32% of the labour force but only contributes
10.3% to its GDP. The Philippines is a mineral-rich country with an unexploited mineral wealth of
US$ 1.4 trillion.2
The Philippine government has pursued legislative reforms to enhance the entrepreneurial
environment and develop a more vibrant private sector to generate broader-based job growth.
Poor infrastructure remains a serious impediment to the country but its economic growth reflects
its efforts in addressing this challenge by developing the infrastructure of the nation with more
than 50 infrastructure projects in the pipeline.3
2
Trillion-Dollar Philippine Economic Goldmine Emerging From Murky Pit, 2015 Forbes Asia
3
Philippines readying 'hundreds' of infrastructure projects, 2016 Nikkei Asian Review

2.3. Trade Overview
The Philippines has been rather cautious in its Free-trade agreement (FTA) policies compared to
some of its ASEAN neighbours, having only 7 signed and in-effect FTAs. The Philippines is a
member of the ASEAN Free Trade Area (AFTA), which plays a key role in the nation’s intra-
Asian trade. ASEAN has FTAs with China, India, Japan, South Korea, Australia and New Zealand.
The Philippines has expressed
interest in joining the US-led EU foreign direct investment stock in the Philippines
Trans Pacific Partnership (TPP) amounted to EUR 6.1 billion in 2013, making the EU
to lower or eliminate trade the largest investor in the Philippines
restrictions. However, the
country has not been invited to join at the present due, among other things, to protectionist
economic policies in its Constitution restricting foreign ownership of property.
Negotiations for an EU-Philippines Free Trade Agreement were launched on 22 December 2015.
The FTA will develop a key aspect of Europe’s overall relationship with the Philippines that is
based on the Partnership and Cooperation Agreement signed in 2012.
With bilateral trade in goods amounting to EUR 12.5 billion in 2014, the EU ranked as the
Philippines' fourth largest trading partner, while the Philippines was EU's sixth largest trading
partner.
EU exports to the Philippines are dominated by transport equipment (30.9%), machinery

(14.9%), food products (13.2%), chemicals (11.5%), and electronic components (11.3%). The
Philippines’ main exports to the EU are office and telecommunication equipment (44.9%),
machinery (15.1%), food products (12.5%), and optical and photographic instruments (11.1%). 4
Bilateral trade in services between the EU and the Philippines reached EUR 4.2 billion in 2015,
while EU foreign direct investment stock in the Philippines amounted to EUR 6.1 billion for the
same year, making the EU the largest investor in the Philippines.
4
European Commission, Trade, The Philippines, ec.europa.eu

The Philippines’s major trading partners contributed a total trade worth US$ 101.2 billion or 78.5%
of the total external trade in 2015. The Philippines’ major trade partners are Japan, China, US,
Singapore and Hong Kong. Among the EU countries, Germany was the country’s top trading
partner. In 2015, Japan was the largest trading partner of the Philippines.
The country’s top export products are electronics, other manufactured goods, machinery and
transport equipment, woodcrafts and furniture, and ignition wiring sets plus other wiring sets used
in vehicles, aircrafts and ships. On the other hand, major Philippine import products were
electronics, mineral fuels and lubricants, transport equipment, industrial machinery and
equipment, and other food and live animals.
2.4. Market Access
The Philippines has emerged as an attractive market for foreign companies due to its strong
economic, democratic and demographic fundamentals. The country offers advantages in the form
of manageable inflation, improving public finances, and a strong demographic dividend in a region
of high growth.
An agent or distributor arrangement is the most common method in entering the Philippine market.
Partnering with a local business is also recommended, as entering the Philippine market presents
some challenges to foreign companies. This is due in part to a limited number of family-owned
conglomerates that dominate key sectors and, in some cases, create high barriers to entry.
An open economy, like the Philippines, allows 100% foreign equity in all areas of investment
except those reserved for Filipinos under the Philippine Constitution and existing laws, such as
private lands, mass media, and small-scale mining. The country also supports Build-Operate-
Transfer (BOT) investment schemes that other Asian countries emulate.
Foreign investments are encouraged by the Philippine government to fuel economic growth.
According to the National Statistical Coordination Board, the total approved foreign investments
in the Philippines for the year 2015 amounted to PHP 245.2 billion (EUR 4.6 billion), an increase
of 31.2% from the previous year.

The Philippines is located right in the heart of Asia – today the region with the fastest economic
growth. It is located within four hours’ flying time from major capitals of the region such as
Singapore, Bejing, and Bangkok. Sited at the crossroads of the eastern and western business,
it is a critical entry point to over 500 million people in the Association of Southeast Asian Nations
(ASEAN) market and a gateway of international shipping and air lanes suited for European and
American businesses.
2.5. Business and Competitive Environment
The Philippines gained 4 positions from 103rd to 99th in the latest Doing Business Rank report
of the World Bank for 2017. According to the World Bank, the country remains a good place as
far as doing business is concerned but it needs to further accelerate its reforms to address tougher
competition.
The Philippine government has created a task force composed of various government agencies
to streamline processes that will improve the country’s rank in terms of ease of doing business.
This includes processes for starting a business, paying taxes as well as social payments.
Ease of Doing Business in the Philippines 2016 Rank 2017 Rank Change in Rank
Starting a business 164 171 -7
Dealing with construction permits 103 85 + 18
Getting electricity 30 22 +8
Registering property 109 112 -3
Getting credit 109 118 -9
Protecting minority investors 136 137 -1
Paying taxes 120 115 +5
Trading across borders 93 95 -2
Enforcing contracts 136 136 /
Resolving insolvency 54 56 -2
Table 1: Ease of Doing Business in Singapore

Source: World Bank

In terms of global competitiveness, the Philippines ranked as the 57th most competitive country in
the world (out of around 140 economies) based on the Global Competitiveness Report of the
World Economic Forum (WEF) for 2016.
The country also has the Board of Investments (BOI), an attached agency of Department of Trade
and Industry, which assists investors to venture into desirable areas of economic activities in the
country.

3. Market Overview & EU Entry Opportunities in the
Philippines
3.1 The Filipino Construction and Building Technology Sector
Similar to other markets, in the Philippines the Construction and Building Technology (CBT) sector
is deeply connected to the mining and construction industries, from which the demand for
machinery, construction materials, and green building originates. Therefore, before analysing the
CBT sector in its main segmentations, it will be useful to consider the drivers of demand.
3.1.1 The Filipino Construction Industry
The following points have been highlighted by the latest government survey in the construction
industry titled “2013 Annual Survey of Philippine Business and Industry - Construction for All
Establishments: Final Results” conducted by the Philippine Statistics Authority (PSA):
 Total value of output generated by all construction establishments amounted to

PHP 344.7 billion (EUR 6.5 billion).
 Total expenses incurred by construction establishments in their business operations

amounted to PHP 316.1 billion (EUR 5.9 billion).
 There were 1,681 establishments engaged in construction in the formal sector of the Philippine
economy.
 Construction establishments employed a total number of 236,192 people.
These figures have massively increased in 2015, as the Philippine’s construction industry was
valued at US$ 30.2 billion (equal to PHP 1.34 Trillion) and was forecasted to grow to
US$ 47 billion by 2020, with a CAGR of 9.22%.5 Additionally, in terms of contribution to the
country's macroeconomic performance, according to a report generated by the Oxford Business
5
Philippine construction works seen growing, 2016, philstar.com

Group in 2016, the construction and real estate development sectors in the Philippines make up
around 20% of the country's economy.
During the Aquino administration, the Philippines’ infrastructure budget increased from
US$ 3.3 billion in 2011 to US$ 17.3 billion in 2016, or from 1.8% to 5% of GDP. To accelerate
infrastructure development, the government of the Philippines tapped private sector resources
and expertise to finance, design, construct, operate and/or maintain infrastructure projects under
its public-private partnership (PPP) programme. As of April 2016, twelve PPP projects worth
US$ 4 billion have been awarded, three of which are completed.
The World Bank and the Asian Development Bank are critical players in Philippine infrastructure
given the specialised financing vehicles they offer. These multilateral banks continue to finance
Philippine infrastructure projects such as road improvement, water and sanitation.
Growth Drivers
With increased investments in the residential, non-residential and infrastructure sector,

the construction industry has been flourishing in the past couple of years and has a solid and
balanced long-term prospect.
 Rapid growth of the economy. From 2010 to 2015, the Philippines averaged a 6.2 % GDP
growth rate making it one of the fastest-growing economies in South East Asia.
 Growth in the business process outsourcing (BPO) industry that led to shortage of office
spaces. The BPO industry is one of the most robust industries in the country and a key driver
of economic growth that generated almost US$ 22 billion in revenues and 1.1 million jobs in
the Philippines in 2015.6
 Tourism is growing in the Philippines, and the sector is expected to create demand for extra
hotel rooms and related facilities which will increase demand for construction machineries.
6
Philippines' back office shines in 2015, exceeds targets, www.rappler.com

 Population growth. The latest population census conducted in August 2015 by the Philippine
Statistics Authority showed that the country's population stood at 100,981,437.
This is 8.64 million higher than the population in 2010, when it was 92.34 million.
 Infrastructure spending is forecast to be the fastest growth sector in the construction industry
due to increase in government spending on large- and small-scale infrastructure, and foreign
assistance.
 Increased investments towards reconstruction and rehabilitation due to destructive typhoons

that hit the country every year.
Non-residential Building Constructions
In terms of new building permits approved from 2010 to 2015, the value of non-residential building
projects averaged at PHP 133 billion (EUR 2.5 billion) with a 59% five-year growth rate. This value
comprises 45.38% of the total approved building permits including residential constructions and
addition, alteration and repair to existing structures during the same period.
Type of Construction 5-Year

2011 2012 2013 2014 2015 5-Year Total Growth
Rate
Number of Non-Residential
Construction Projects 14,881 15,952 14,622 15,191 16,126 76,772 8%
Number of Non-Residential
Construction Projects in 8,875 11,295 10,278 12,811 12,793 56,054 44%
Floor Area (‘000 sq.m.)
Value of Non-Residential
Construction without
89,952 112,083 135,163 184,873 143,221 665,293 59%
addition, alteration and
repair (in PHP ‘000’000)
Total Value of All Approved
Building Permits including
Residential Construction
Projects, Addition, 212,975 261,828 293,136 366,551 331,592 1,466,083 56%
Alteration and Repair to
Existing Structures (in PHP
‘000’000)
Table 2: Non-Residential Construction Statistics from Approved Building Permits for Year 2010 to 2015
Source: Philippine Statistics Authority

Residential Building Constructions
In terms of newly approved building permits, projects for residential building constructions have
surpassed non-residential building constructions in 2015 with a value of PHP 160 billion
(EUR 3 billion). Moreover, residential building construction projects posted a five-year average
share of 45.88%, just a few points ahead of non-residential building projects.
Type of Construction 2011 2012 2013 2014 2015 5-Year Total 5-Year
Growth
Rate
Number of Non-
Residential
81,537 87,347 87,767 90,201 97,174 444,026 19%
Construction
Projects
Number of Non-
Residential
Construction 11,674 13,687 13,672 14,935 15,723 69,692 35%
Projects in Floor Area
(‘000 sq.m.)
Value of Non-
Residential
Construction without
100,220 125,864 133,783 152,755 160,065 672,690 60%
addition, alteration
and repair (in PHP
‘000)
Total Value of ALL
Approved Building
Permits including
Residential
Construction 212,975 261,828 293,136 366,551 331,592 1,466,083 56%
Projects, Addition,
Alteration and Repair
to Existing Structures
(in PHP ‘000)
Table 3: Residential Construction Statistics from Approved Building Permits for Year 2010 to 2015

Infrastructure
The infrastructure segment is set to be the fastest in the construction industry, with projected
value reaching US$ 14.7 billion in 2020 at a CAGR of 14.14%, according to Timetric’s
Construction Intelligence Centre.
As a whole, the Philippines is severely constrained by the lack of infrastructure. Port, railroad and
road infrastructure is relatively underdeveloped. The World Economic Forum ranks the
Philippine's infrastructure 90th out of 140 countries in the world.
3.1.2 The Filipino Mining Industry
The mining industry contributes to around 1% of the Philippines’ GDP. Being located on the
fringes of the Pacific Ring of Fire makes the Philippines is prone to natural disasters. However,
the same location endows the country with natural resources such as natural gas and minerals.
The archipelago rests on top of underwater mountains formed by the outpourings of molten rocks
from the earth's interior, thus creating an ideal setting for mineral deposition.
The Philippines is ranked top five in the world for overall mineral reserves which are estimated
to be valued at US$ 1.4 trillion. According to the Department of Environment and Natural
Resources (DENR), the country is the world's largest supplier of nickel ore. Additionally, according
to DENR’s Mines and Geosciences Bureau (MGB), the Philippines is second in the world for gold
and third for copper resources. The country is also rich in aluminium and chromite resources.
The following were the results of the 2013 Annual Survey of the “Philippine Business and
Industry - Mining and Quarrying for All Establishments: Final Results conducted by the Philippine
Statistics Authority (PSA).”7
7
The report was released in 2016

 Value of output generated by the top three industries comprised more than three-fourths
(76.7%) of the total:
 Natural gas, PHP 66.1 billion (34.7%, equivalent to EUR 1.2 billion circa).
 Copper ore mining, PHP 41.3 billion (21.7 %, equivalent to EUR 0.7 billion circa).
 Nickel ore mining, PHP 38.8 billion (20.4%, equivalent to EUR 0.7 billion circa).
 Other industries with value of output of more than one billion PHP are as follows:
 Mining of hard coal, PHP 17.2 billion, equivalent to EUR 320 million circa.
 Gold ore mining, PHP 15.2 billion, equivalent to EUR 282 million circa.
 Support activities for other mining and quarrying, PHP 4.0 billion, equivalent to
EUR 75 million circa.
 Oil and gas extraction activities on a fee or contract basis, PHP 2.0 billion, equivalent to
EUR 37 million circa.
 Sand and gravel quarrying, PHP 1.5 billion, equivalent to EUR 28 million circa.
 Stone quarrying, clay and sand pits, PHP 1.4 billion, equivalent to EUR 26 million circa.
 Limestone quarrying, PHP 1.3 billion, equivalent to EUR 26 million circa.
 Total expense incurred by all mining and quarrying establishments in 2013 was estimated at
PHP 116.4 billion, or EUR 2.1 billion circa.

Total Mining Estabishment = 253
Support
activities
Extractio 6%
n of salts
6%
Limestone
quarrying
7%
All other industries
36%
Nickel ore mining
9%
Gold ore mining

13%
Sand and gravel quarrying

23%
Figure 2: Percentage Distribution of Value of All Mining and Quarrying Establishments

 The survey also showed that there were 253 establishments engaged in mining and quarrying
activities in the formal sector of the economy with the following ranking:
 Sand and gravel quarrying recorded the highest number of establishments (23.3% of the total)
 Gold ore mining placed second with 34 establishments (13.4%)
 Nickel ore mining and stone quarrying, clay and sand pits came third, as both recorded
25 establishments (9.9%).
 Limestone quarrying, 18 establishments (7.1%)
 Extraction of salts, 15 establishments (5.9%)
 Support activities for other mining and quarrying, 15 establishments (5.9%)

 Mining and quarrying activities in the Philippines employed 35,940 workers in 2013. The three
industries with the highest number of workforce comprising 72.4% of the total were:
 Nickel ore mining employed 10,412 workers
 Copper ore mining with 8,868 workers
 Gold ore mining occupied the third spot with 6,718 workers
Employment in Mining
Nickel ore mining

Other mining activities 29%
27%
Gold ore mining

19% Copper ore mining
25%
Figure 3: Employment in Mining


3.1.3 Key Associations
Philippine Constructors Association (PCA)
The Philippine Constructors Association (PCA) acts as a catalyst for

the continuous improvement of standards and practices for the local
building industry. Its aim is to achieve a sustainable and globally
competitive construction industry to benefit primarily the Philippines
and its people. The PCA has 1,500 members nationwide, undertaking 80% of government
infrastructure projects. Members of the association are engineering, building, trade and specialty
contractors duly accredited by the Philippine Contractors Accreditation Board (PCAB), including
construction materials and equipment suppliers and distinguished personalities of the
construction industry and other allied organisations. Associate membership is open to firms
engaged in the business of manufacturing or supplying construction materials, supplies or
equipment or of providing credit and guarantee facilities, underwriting insurance for the
construction industry, or actually engaged as technicians performing allied or auxiliary services
to the construction industry.
Construction Industry Authority of the Philippines (CIAP)
The Construction Industry Authority of the Philippines (CIAP) is

established with the primary task to promote, accelerate and regulate
the growth and development of the construction industry in conformity
with national goals. It exercises jurisdiction and supervision over the
following implementing boards:
 The Philippine Contractors Accreditation Board (PCAB), which issues, suspends, and revokes
licenses of contractors; the Philippine Domestic Construction Board (PDCB), assigned to
formulate, recommend, and implement policies, guidelines, plans, and programmes for the
efficient implementation of public and private construction in the country.
 The Philippine Overseas Construction Board (POCB), which assigned to formulate strategies
and programmes for developing the country's overseas construction industry.

 The Construction Industry Arbitration Commission (CIAC), which takes charge of disputes
arising from, or connected with, government and private contracts.
3.1.4 Entry Strategies
The Philippines offers interesting opportunities for European companies operating in the
Construction Equipment, Building Materials, and Smart Building segments. Prior to establishing
a direct presence in the country, European Construction & Building Technology companies may
test the Pilipino market through:
 Partnerships and joint ventures
 Online commerce
 Tendering opportunities
 Tradeshow participation
Partnerships and Joint Ventures
The Filipino market is complex. It is therefore advisable that European Construction & Building
Technology companies enter collaborations with local companies with a deep knowledge of the
market. European CBT companies may find it advantageous to enter joint ventures as this can
expand distribution capacity, and local service providers can assist with providing after-sales
repair and maintenance services. This may also be a popular option for European companies
seeking to gauge their product’s potential in the wider South East Asian market.
Online commerce
An increasing number of consumers in the Philippines are buying products through on-line
platforms. The Department of Trade and Industry (DTI) has recently stressed its commitment to
facilitating this growth in the on-line market.8 It is forecasted that by 2020 the on-line market is will
contribute to 25% of the country’s gross domestic.
8
E-commerce seen as major growth driver by 2020, 2016, The Manila Times

Tendering opportunities
Government procurement requires a local partner, including tender for construction activities.
Government tenders vary and range from simple purchases such as equipment and building
machinery, to consulting services for complex projects. Public tenders can be found on philgeps.gov.ph
Tradeshows
The largest construction show in the Philippines,

Philconstruct, has been playing a major role in the
industry for almost three decades. This trade show
has become a solid platform that serves as a meeting place for the industry’s movers, gathering
thousands of leading brands and buyers around the globe.
The Philippine Building & Construction

Exposition (Philbex) is a 4-day event showcasing
products like building materials, equipment and services; construction materials, equipment and
services; interior designs, renovation products; mechanical engineering systems; electrical
engineering systems; construction promotions; information technology; telecommunications; real
estate and housing etc. in the Building Construction industry.
3.1.5 Challenges & Entry Barriers
Although it is in a developing stage, the Philippines represents an interesting market with many
opportunities for the European Building and Construction Technologies sector. However, some
challenges remain. Corruption, a constraint to business and outside investment, is a pervasive
and long-standing challenge in the Philippines. Also, the Philippines’ complex, slow, and
complicated judicial system can inhibit the timely and fair resolution of commercial disputes.
Most cases take many years to reach a final verdict. The Philippines lags behind many of its
neighbours in infrastructure development. Major improvements are needed in transport
infrastructure. Finally, the VAT tax is high: a 12% tax levied on the sale of all goods and services,
including imports of goods into the Philippines.

3.2 Construction Machinery
3.2.1 Market Overview
The construction equipment industry in the Philippines was valued at PHP 20 billion
(EUR 376 million) in 2015.9 Machines, engines, and pumps are among the top imported
products in the country, which in 2015 amounted to 11.6% of the total Philippine imports. 10 In
particular, the Philippines imports about 2,500 units of mixed-use heavy equipment including
excavators, pay-loaders, backhoes, road compacters and cranes annually.11
Among all applications of
As the government is focusing on the environmental construction machineries, the

sustainability of the industry, leading construction machinery majority of the revenues come
vendors to seek greener products from the construction sector
followed by the mining sector.
Developments in these two sectors have a direct impact on the sales and rental of construction
equipment, particularly excavators, which comprise half of the demand for construction
machinery in the country. The new government is also focusing on the environmental
sustainability of the industry, leading construction machinery vendors to seek greener products.
Overall, the long-term prospects are positive, brought about by the property and infrastructure
boom in the Philippines that could be unprecedented in South East Asia as the country enters its
economic boom.
With the exception of a flat 2014, imports of construction machinery have constantly grown
in value. In 2015, total imports of construction equipment in the Philippines amounted to more
than US$ 500 million. The value of imports has more than doubled from 2011 to 2015.
9
Heavy equipment trader eyes market leadership in 5 years, Philstar
10
Philippines Top 10 Imports, 2016, www.worldstopexports.com
11
Equipment firm sees robust sales growth, 2015, Manilastandard.com

Imported value in Imported value in Imported value in Imported value in Imported value in
2011 2012 2013 2014 2015
211,314 329,555 374,156 344,308 500,496

Table 4: Value of Imports of Construction Machinery
Source: COMTRADE
Note: Values are in US$ Thousands.
HS Codes: 8429; 8430; 8474
In the sub-sector, there are few large players and many small players. The Philippines’ industry
is highly dependent on imports from countries such as China, Japan, South Korea, the US and
European countries. Considering imports of construction machinery in 2015, the Philippines’
largest trading partners are, by far, China and Japan. These two countries exported construction
equipment worth more than US$ 250 million. In the same year, Germany ranked as the 5 th largest
source of imports. Other European countries such as Finland, France, the United Kingdom, and
Sweden were among the top 15 suppliers of building machinery.
Rank Partner Net Weight Trade Value

(kg) (US$)
1 China 44,555,347 143,070,217

2 Japan 39,596,794 115,202,370
3 Rep. of Korea 14,206,727 58,127,156
4 Thailand 4,243,239 34,824,774
5 Germany 1,653,029 28,532,294
6 India 3,966,774 24,493,703
7 USA 1,694,791 13,814,927
8 Singapore 2,304,009 13,061,317
9 Finland 599,786 9,084,169
10 France 674,639 6,466,695
11 United Kingdom 403,793 6,127,280
12 Indonesia 1,105,036 5,903,152
13 Sweden 191,912 5,813,013
14 Malaysia 915,342 5,081,946
15 Australia 410,088 4,066,879
Table 5: Largest Trading Partners for Imports of Construction Machinery in 2015
Source: COMTRADE
HS Codes: 8429; 8430; 8474

Recent currency depreciation in the Philippines resulted in an increase in the prices of the
equipment. However, with the slowdown of the Chinese economy, many Chinese manufacturers
have started focusing on the Filipino market, thus contributing to keeping prices contained thanks
to imports of cheap equipment.12
The construction machinery industry in the Philippines is becoming increasingly sophisticated

and there is an intense competition among well-established players such as Hitachi Philippines,
Caterpillar Inc., Volvo, and Komatsu.
In the country, important buyers of construction machinery are:
 Department of Public Works and Highways (DPWH)
 Contractors/ Developers
 Mining Companies
Contractors/ Developers
Company Profile Link
Ayala Land This real estate firm is publicly listed in the www.ayalaland.com.ph
Philippine Stock Exchange, and it focuses on
strategic landbank management, residential
development, shopping centres, corporate
businesses, and hotels.
San Miguel Corp. This is a Filipino multinational publicly listed www.sanmiguel.com.ph

conglomerate holding company. It is the
Philippines' largest corporation in terms of
revenue.
12
Infrastructure Projects Fuelling the Growth of Construction Equipment Market in South-East Asia Region, 2016, 6Wresearch

EEI Corporation This publicly-listed company engages in general www.eei.com.ph

construction. It was originally established as
machinery supply house for the mining industry
and eventually expanded into provisioning
construction services and a broader range of
industrial machinery and systems.
Megaworld Corporation This real-estate company develops large-scale, www.megaworldcorp.com

mixed-use, planned communities incorporating
residential, commercial, educational, and leisure
components.
Philippine National PNCC is a majority government-owned and/or www.pncc.ph

Construction Corp. (PNCC) controlled corporation in the Philippines. It is the
largest construction company in the Philippines
and in South East Asia.
SM Development Corp. SM Development Corporation invests and www.smdc.com

(SMDC) develops real estate properties. The Company
offers stores, malls, banks, hotels, and leisure
facilities.
Robinsons Land This company is involved in the development and www.robinsonsland.com

Corporation operation of shopping malls and hotels, mixed-use
properties, office buildings, residential
condominiums, as well as land and residential
housing projects
Century Properties This is a real estate company in the Philippines www.century-properties.com

focusing on high-rise and mid-rise residential
condominiums and mixed-use developments.

Filinvest Development The company is a conglomerate that operates www.filinvestgroup.com

Corporation subsidiaries involved in real estate development
and leasing, the sales of housing units, and hotel
and resort management.
Megawide Construction This is a leading construction company that has megawide.com.ph

Corporation completed numerous low-rise and high-rise
condominiums and industrial buildings, including
the Antel Spa Residences, Citysquare
Residences, Bellevue Hotel, Hotel Kimberly
Tagaytay, Millenia Tower and Parcvue Hotel.
Table 6: Example of Contractors / Developers Buyers of Construction Machinery in the Philippines
Mining Companies
Benguet Corp. This company is engaged in gold, nickel and other benguetcorp.com
metallic and non-metallic mineral production,
exploration, research and development and
natural resource projects.
Lepanto Consolidated Lepanto is engaged in gold bullion production. The www.lepantomining.com

Mining Company Company produces gold from its Victoria Project,
which is located in Mankayan, Benguet.
Philex Mining Corp. This is the largest gold and copper producer in the www.philexmining.com.ph
Philippines, having continuously operated the Sto.
Tomas II deposit at Padcal, Tuba, Benguet,
Philippines since 1958.

Mining Companies
Oceana Gold (Philippines), This is a Canadian-Australian firm producing gold www.oceanagold.com

Inc. and copper. It has operations in New Zealand and
the Philippines, where it engages in the
exploration, development, operation, and
production of gold and other minerals.
Atlas Consolidated Mining Atlas is engaged in metallic mineral mining and www.atlasmining.com.ph
& Development Corp. exploration, and produces copper concentrate
(with gold and silver), magnetite iron ore
concentrate and laterite nickel.
Apex Mining Co., Inc. Apex is engaged in the business of mining, milling, www.apexmines.com
concentrating, converting, smelting, treating,
minerals such as gold, silver, copper, and lead.
Philippine Associated PASAR owns and operates copper smelter and www.pasar.com.ph
Smelting & Refining Corp. refinery in the Philippines. Its products are used in
(PASAR) various applications ranging from building
constructions to industrial equipment.
Table 7: Example of Mining Companies Buyers of Construction Machinery in the Philippines

The excavator market in the
Philippines has experienced overall
high growth from 2010 to 2015.
Excavator use in the country is still at
low levels compared to many
developing economies, although the
local market is still growing.13
Excavators account for about 50% of
total sales of building equipment in
the Philippines, while pay loaders,
backhoes, road compacters and
Figure 4: Excavators Account for 50% of Total Sales of Building Equipment
cranes, among others, account for
the remaining share. According to recent analyses:
 Imported excavators dominate the Philippine market, mainly from leading global brands such
as Hyundai, Volvo, Caterpillar and Komatsu.
 Most of the exclusive dealers of major brands in excavator sales market in the Philippines are
also in the rental market business. These companies generally have a fleet size of more than
70 excavators, and offer a wide variety of excavators as compared to independent rental
companies. The majority of small rental companies offer compact and low powered medium
excavators.
 The Philippines’ excavator market is segmented based on engine power. Excavators with
engine power in range of 75-300hp (medium range) hold the highest market share.
 The share of compact excavators is expected to rise. Sales of wheel type excavators are also
expected to increase as urbanisation increases.
 The limited number of high buildings in the Philippines is the major factor which constrains the
sale of long reach/long arm excavators.
13
Philippines Excavator Market Forecast to 2020, 2016, PRNewswire

HVAC systems14
Being located in a tropical region, the climatic conditions in the Philippines create demand for
cooling in both residential and commercial buildings. In contrast with neighbouring countries,
window air conditioners remain the most popular type of room air conditioner in the country, while
mini splits (units have a split design but without an elaborate system of ducts) are becoming more
requested. The affordability of heating, ventilation and air conditioning (HVAC) systems is limited
by the price of electricity; in the Philippines, electricity prices are among the highest in the world. 15
Imports of HVAC systems have grown steadily from 2011, to 2015, reaching a value of
US$ 404 million.
Imported value in Imported value in Imported value in Imported value in Imported value in
2011 2012 2013 2014 2015
215,747 254,465 285,164 307,765 404,056

Table 8: Value of Imports of HVAC Systems
Source: COMTRADE
Note: Values are in US$ Thousands.
HS Codes: 8414; 8415; 8416
Asian countries, led by China and Japan, are the largest suppliers of HVAC systems in the
Philippines, while European countries follow. In 2015, Belgium was the most important supplier,
ranking 10th with value of exported HVAC systems amounting to US$ 8 million.
Rank Partner Trade Value (US$)

1 China 95,265,153
2 Japan 66,597,491
3 Thailand 59,906,090
4 Malaysia 31,818,349
5 Singapore 22,690,622
6 Viet Nam 15,702,623
7 Rep. of Korea 14,391,178
8 China, Hong Kong SAR 12,283,545
9 USA 11,857,506
10 Belgium 8,137,270
11 Indonesia 7,510,864
14
The EU Gateway │Business Avenues considers HVAC systems as a segment of the construction machinery market
15
Philippines HVAC 2016, 2016, Global Information

Rank Partner Trade Value (US$)
12 Germany 6,532,831
13 United Kingdom 5,537,679
14 Italy 4,487,860
15 India 4,370,427
Table 9: Largest Trading Partners for Imports of HVAC Systems in 2015
Source: COMTRADE
HS Codes: 8414; 8415; 8416
Local Players
In the Philippines, most local construction machinery companies are distributors of American,
Japanese, and European brands.
Kilton Motor Corporation was established in 1986, it has since grown to be a reputable name
in the industry, as it continues to serve the Philippines’ needs for commercial trucks, Japanese
generators with small to 2-megawatt capacity, warehouse and material handling equipment, and
motorsports organisation and distribution. With more than 25 years of experience, and expertise
on rental of equipment and parts supply, the parent company Brighton Machinery Corporation
(BMC) is the exclusive dealer of Hitachi construction & mining equipment, Bell equipment, and
John Deere Construction equipment in the Philippines. Presently, Brighton has an existing Cebu
branch office, and planned branches in Davao and Cagayan de Oro.
Monark Equipment is one of the leading players in the Philippines. The company is the sole
dealer of Caterpillar equipment in the country. Monark Equipment was founded in the Philippines
in 1987, specialising in earth-moving machinery. Major projects undertaken by the company in
the country include the Philippine Nuclear Power Plant, Pantabangan Dam, Magat Dam, Makban
Geothermal, San Roque Dam Roadworks. In 2015, the company Monark passed the ISO 9001:
2008 certification. PowerAsia Equipment Resources Inc. is a member of the Monark Group of
Companies, and has been a distributor of FG Wilson generators since 1999.
Castle Power Solutions Philippines is a Filipino construction machinery company specialising

in earthmoving equipment. The company is the sole appointed distributor of Perkins products and
services and has also been awarded the exclusive distributorship of Shandong Sem Machinery
Co., Ltd., a wholly owned Caterpillar heavy equipment manufacturer in Shandong, China.

Guzent is a company headquartered in the Philippines specialising in the sale of construction
equipment. The company has been in business for over 50 years. Guzent has a 24,000 square
meter facility right in the heart of Metro Manila. In the Philippines, the company is involved in the
sales and rental of aerial platforms, air compressors, backhoes, loaders, boom trucks, cranes,
excavators, forklifts, generators, graders, hydraulic breakers, jack hammers, light towers, wheel
loaders, road rollers, vibratory compactors, scissor lifts, skid steer loaders, tele-handlers,
telescopic clamshells, trucks, and welding machines.
3.2.2 EU Entry Opportunities
Within the context of entry opportunities for European companies, it is important to highlight the
following points:
 The first element that Filipino customers consider is whether to buy or rent construction
machineries. This is determined by the period of usage, the availability of machine with desired
operating characteristic / features and rental amount, terms and conditions. If the usage is to
be long enough and if the buyer has sound financials, Filipinos usually prefer to buy than rent.
Mining companies generally prefer buying their machines and secure a customised
maintenance programme to reduce downtime. Clients rent only for specific use or when the
machine is needed for only a short period of time.
 Having good technical support, training and services is a crucial factor that Filipino distributors
and end-users take into consideration when choosing and promoting a product or service,
especially if it is new in the market. The country is prone to natural disasters. That is why risk
management abilities are an important factor that developers take into account in choosing a
contractor.
 The capital-city of Manila offers the most interesting opportunities. The construction boom of
the city creates demand for construction equipment. Moreover, most sales of building
machineries take place in Manila because the head offices of construction companies are
based there.

 Public tenders. Competition from Asian countries offering low-priced products creates the
need for sellers of premium equipment to start connecting with the clients pre-bidding in order
to explain why the products offered are more expensive.
 If the buyer is from the private sector, the crucial factors are referrals and reputation. Products
and services from European countries are associated with better quality and durability than
cheaper ones from China.
 On-line channel. According to a study released by market research firm Nielsen, an estimated
80% of internet-savvy Filipino consumers would buy new products from familiar brands rather
than switch to a new brand. To help the public familiarise with the brand, it is advisable to
advertise with endorsements from local celebrities and using channels such as TV, major
national newspapers, and social media.
European Players
J.C. Bamford Excavators Ltd. (JCB)
JCB is one of the largest construction equipment manufacturers in the world and is headquartered
in the United Kingdom. Their current exclusive distributor in the Philippines is Icon Equipment
Solutions Philippines, Inc.
In August 2015, Icon announced that it aims to grow their market share in the Philippines by 25%
within the next five years. In the second half of 2014, Icon sold about 40 units of heavy equipment
in the Philippines, most of them excavators. To expand in the market, JCB and Icon set out the
following strategy:

 They mainly target to compete with Korean-brand heavy equipment, particularly backhoe
loaders.
 JCB products would be positioned competitively below the prices of popular American and
Japanese models.
 Focus on durability and cost-efficiency of the products, allowing customers to save on fuel
expenses.
 Icon is planning to increase its dealers in Luzon from two to five, expanding to the Visayas
and Mindanao islands.
 It is also worth-noting that since Icon is a relatively new player, they have embarked on
aggressive marketing activities such as engaging the press through press conference and
press releases
Aside from JCB, Icon also carries Industrial Vehicle Corp. (Iveco), an Italian truck, bus and light-
commercial vehicle manufacturer; and Fiori Group, an Italian concrete equipment manufacturer.
Volvo Construction Equipment
Volvo Construction Equipment is a major international company that manufactures equipment for
construction and related industries. The company was founded and headquartered in Sweden.
In the Philippines, Volvo CE has a strong brand name and is the second largest player in the
excavator market, just next to Hyundai. Aside from excavators, it also provides compactors, wheel
loaders, articulated haulers and asphalt pavers for the Philippine market. Their main clients in the
country are the DPWH and private contractors. Volvo granted exclusive distributorship to Civic
Merchandising, Inc. in 1986.
When Typhoon Haiyan hit the Philippines in November 2013, it led to the loss of 6,000 lives,
destroying over 500,000 homes in Eastern Visayas. Volvo donated SEK 7.5 million (EUR 785,000
circa) to Oxfam, an international charity organisation, and offered trucks on loan to assist in the
relief efforts. Volvo CE and Civic Merchandising provided 15 new EC210 B-Series excavators.
Ten of the units arrived in January 2014 and were immediately used by the DPWH, while the

remaining five units were deployed in February of 2014. for use by the United Nations
Development Programme (UNDP).
CNH Industrial N.V.
CNH Industrial N.V. is one of the world's largest capital goods companies with a corporate office
in London. Through its subsidiaries, they design, manufacture, market and finance agricultural
and construction equipment, trucks, commercial vehicles, buses, and specialty vehicles, engines,
transmissions, and axles worldwide. For the construction division, they own Case Construction
Equipment that provides a full line of construction equipment such as compact track loaders,
crawler dozers, crawler excavators, backhoe loaders, motor graders, skid steer loaders and wheel
loaders.
In the Philippines, Case Construction Equipment is distributed by BJ Marthel International, Inc.

and Filholland Corporation. Their equipment is mainly sold to the DPWH and private contractors.
As part of its corporate social responsibility, CNH Industrial and its distributors provided in
December 2013 to the UNDP a fleet of five machines for relief operations in the aftermath of the
Typhoon Haiyan. According to a UNDP consultant, “These machines are very effective because
they are able to go deep into the narrow roads. The backhoe loaders have a multifunction; they
can do different jobs for specific situations. The skid steer is very good when we combine it with
the manual work. It’s a supersized wheelbarrow and we were able to clean out the debris faster.”

3.3 Building Materials and Building Installation
The Philippines is heavily dependent on imported building and construction materials, with high
demand across the sector. Basic materials such as
cement, aggregates, reinforcing steel bars, galvanised
Lower import tariffs resulting from the
iron sheeting and lumber are imported in large
ASEAN economic integration and
quantities, primarily because of shortfalls in local
FTAs with other countries are set to
benefit the local industry production and its comparatively high cost.16
Demand of construction materials (such as steel and
other metals), surge periodically as a consequence of
natural disasters such as the super-typhoon Haiyan.17
Robust local demand has created a lucrative market for steel processors in the Philippines,
contributing to back local production. Crude steel output has nearly tripled over the past decade,
increasing from 470,000 tonnes in 2005 to 1.2 mil tonnes by 2014, according to data from the
World Steel Association. This business is spread among some 12 different companies operating
in the country, the largest by far being SteelAsia, which holds nearly 50% of the domestic steel
rebars market.18
Since the Philippines is a net importer of most categories of building materials, lower import tariffs
resulting from the ASEAN economic integration and FTAs with other countries are set to benefit
the local industry. Bamboo and other wood-based materials and non-metallic minerals are among
the commodities exported by the Philippines in considerable quantities.19
The price index of the wholesale and retail of construction materials has shown an upward trend
in the fifteen years from 2001 to 2015, posting an overall CAGR of 105%.
16
Building and construction to the Philippines, Austrade
17
Positive Economic Outlook for the Philippines as Exports and Imports See Strong Growth, ASEAN Briefing
18
Export growth continues on a strong trajectory in the Philippines, Oxford Business Group
19
Philippine Trade and Investment, 2015, jakartape.dfa.gov.ph

Year All Items Sand / Concrete Cement Hardware Plywood Lumber G.I. Reinforcing Structural
Gravel Sheet Steel Steel
2000 100 100 100 100 100 100 100 100 100 100
2001 105.8 103.2 105.6 117.5 104.4 103.3 104.5 100.7 107.8 106
2002 106.9 108.8 105.6 111.1 106.4 107.5 107.3 97.7 109.1 109.6
2003 111.7 113.7 107.1 98 109.3 110.2 111.5 100.8 117.1 120.3
2004 123.5 115.3 116.4 119.6 117.3 115.6 118.6 110.5 136.2 148.6
2005 143.4 128.4 132.1 137.3 135 129.1 138.1 129.4 159.5 176.4
2006 162.6 144.7 149.7 147.6 149.6 137.7 153.5 132.7 179.2 192
2007 167.5 151.5 153.9 154.6 154.3 139.9 157.8 140.5 183.3 201.7
2008 185.4 160.7 167.1 166.5 174.2 146.2 168.9 147.3 200.2 240.1
2009 187.7 166.5 178.2 178.8 194.1 150 178.2 160.5 209.2 238.4
2010 195 169.9 182.1 185.3 195.1 154.2 196.3 169.9 218.1 241.4
2011 209.8 182.3 193.2 179.5 203.1 170 214.2 173.4 235.4 261.3
2012 217.6 197.5 199.5 179.7 210.7 178.1 223.8 176.8 245.6 276
2013 221.6 202.3 204 190.2 214.1 180.5 230 182.3 251.4 281.1
2014 225.8 211 208.9 197 219.1 185.4 241.7 189.5 253.3 284.4
2015 224.2 216.2 212.9 196.6 223.9 192.8 246.7 191.3 254.8 286.8
CAGR 105% 105% 105% 103% 105% 104% 106% 104% 106% 107%
Table 10: Construction Materials Wholesale Price Index, Part 1
Unit: 2000 = 100
Year Tileworks Glass Doors, Electric Plumbing Painting PVC Fuels / Asphalt Machine
Jambs Works Fixtures Works Pipes Lubric- Rental
and Steel ants
Casement
2000 100 100 100 100 100 100 100 100 100 100
2001 103.9 101.8 101 103.5 102.4 102.6 104 110 127.2 100
2002 107.4 117.8 103.4 105.8 105.1 114.5 108 108.9 126.4 100
2003 111.1 126.5 115.1 108.7 108.5 118.1 110 123.9 152 112.8
2004 116.2 127.1 122.2 116.9 114.5 124.5 116 142.8 168.8 112.8
2005 134.5 153.9 137.7 137.6 128.6 144.6 134 184.8 190.2 112.8
2006 146.8 162 168.1 152 137.8 156 148 223.9 229.9 112.8
2007 150.7 165.2 174.7 156 140.8 159.9 152 228.8 277.4 112.8
2008 154.7 166.1 183 165.2 143.1 176.5 158 290.8 335 114.3
2009 158.1 170.2 188.8 168.6 145 179.8 163 232.9 345.8 114.6

Year Tileworks Glass Doors, Electric Plumbing Painting PVC Fuels / Asphalt Machine
Jambs Works Fixtures Works Pipes Lubric- Rental
and Steel ants
Casement
2010 159.5 173.8 178.9 170.3 146.5 184.1 166 278.5 363.7 114.6
2011 166 177 189.5 182.6 152.8 192.8 168 324.9 418.7 114.6
2012 172.8 178.5 197.2 193.2 155.6 202 172 336.3 448.1 114.6
2013 179.8 179.5 200.7 197.8 160 203.8 203 333.3 464 114.6
2014 187 183.4 204.2 204.1 169.7 206.3 180 329.9 464 123.2
2015 188.6 185.2 206.1 210.3 179.7 208.5 183 275.6 466.8 168.7
CAGR 104% 104% 105% 105% 104% 105% 104 106% 109% 104%
%
Table 11: Construction Materials Wholesale Price Index, Part 2
Unit: 2000 = 100
In the Philippines, cement is one of the most widely used construction materials. The price
index for cement decreased slightly in 2015. This is attributed to the increase in production
capacity and rising investment in the construction sector. According to a recent report published
by the Oxford Business Group,20 it is forecasted that this trend will continue to shape the cement
industry in the years ahead. Other recent developments include:
 In January 2016, Taiheiyo Cement, a Japanese-owned company based in Cebu, inaugurated

a new US$ 14.7 million finish mill and doubled the capacity of its port facilities’ at a cost of
US$ 6 million.
 In 2015 Northern Cement, a large player and a pioneer of the local industry, announced a new
US$ 200 million factory in Sison, Pangasinan province, which is expected to double the
company’s annual capacity to 2 million tonnes. San Miguel Group holds a 35% stake in
Northern Cement. San Miguel companies are building five new cement plants at a cost of
US$ 1 billion, up from the US$ 800 million initially announced in early 2015. These five plants
will add 10 million metric tonnes of annual capacity and this will propel San Miguel as the
largest cement-producer in the Philippines.
20
The Philippines' bustling economy leading to a series of developments in the construction sector, Oxford Business Group

 The ASEAN economic integration is expected to substantially lower the price of cement as
tariff rates go down and competition intensifies.
Construction materials are generally imported from neighbouring countries, especially China
and Vietnam. The market is price-sensitive, and proximity allows saving on time and cost. China
is the leading supplier of construction materials, making the market in the Philippines often
volatile. Regarding the main materials used in the local construction industry, the following points
can be highlighted:21
 Earths and stone; plastering materials, lime and cement. Filipino imports outnumber exports;
in 2016 the country imported goods valued at more than US$ 450 million, whereas sales
abroad amounted to just US$ 15 million. Vietnam and China are the main suppliers, and import
flows have been growing steadily, particularly between 2015 and 2016.
 Wood and articles of wood. The Philippines has large forests, and the country has a positive
trade balance for what concerns wood. Nonetheless, imports of wood have grown from
US$ 315 million in 2012, to US$ 561 million in 2016, with China and Canada as main
suppliers. In the same year, the Philippines exports of woods were valued at US$ 2.8 billion,
and Japan was by far the biggest market.
 Articles of stone, plaster, cement, asbestos, mica or similar. Similarly to other construction
materials, China is the main supplier, followed by other Asian countries such as Thailand and
Japan. In 2016, Italy was the 9th supplier.
 Ceramic products including tiles. The Philippines exported just US$ 27 million worth of ceramic
products in 2016, whereas the country imports for the same year were valued more than
US$ 420 million, with China accounting for ¾ of the total value.
 Glass and glassware. China is the leading supplier, and in 2016 the country’s exports
amounted to US$ 161 million, more than half of total Pilipino imports. Exports from the
Philippines in the same year were valued to US$ 46 million, with Japan, Australia, and the US
as the main markets.
21
For detailed trade data please refer to the chapter 5.3

 Iron and steel. The Philippines represent a vast market for iron and steel, and import flows
have been growing steadily in the last years. In 2016, the country imported iron and steel
valued at more than US$ 3 billion, and China alone accounted for US$ 2.2 billion, followed by
Japan, Taiwan, and Korea.
In the country, important buyers of construction materials and building installation are:
 Department of Public Works and Highways (DPWH)
 Contractors/ Developers
Ayala Land This real estate firm is publicly listed in the Philippine www.ayalaland.com.ph
Stock Exchange, and it focuses on strategic landbank
management, residential development, shopping
centers, corporate businesses, and hotels.
San Miguel Corp. This is a Filipino multinational publicly listed www.sanmiguel.com.ph

conglomerate holding company. It is the Philippines'
largest corporation in terms of revenue.
EEI Corporation This publicly-listed company engages in general www.eei.com.ph

construction. It was originally established as machinery
supply house for the mining industry and eventually
expanded into provisioning construction services and a
broader range of industrial machinery and systems.
Megaworld This real-estate company develops large-scale, mixed- www.megaworldcorp.com

Corporation use, planned communities incorporating residential,
commercial, educational, and leisure components.

Philippine National PNCC is a majority government-owned and/or controlled www.pncc.ph

Construction Corp. corporation in the Philippines. It is the largest
(PNCC) construction company in the Philippines and in South
East Asia.
SM Development SM Development Corporation invests and develops real www.smdc.com

Corp. (SMDC) estate properties. The Company offers stores, malls,
banks, hotels, and leisure facilities.
Robinsons Land This company is involved in the development and www.robinsonsland.com

Corporation operation of shopping malls and hotels, mixed-use
properties, office buildings, residential condominiums,
as well as land and residential housing projects
Century Properties This is a real estate company in the Philippines focusing www.century-properties.com
on high-rise and mid-rise residential condominiums and
mixed-use developments.
Filinvest The company is a conglomerate that operates www.filinvestgroup.com

Development subsidiaries involved in real estate development and
Corporation leasing, the sales of housing units, and hotel and resort
management.
Megawide This is a leading construction company that has megawide.com.ph

Construction completed numerous low-rise and high-rise
Corporation condominiums and industrial buildings, including the
Antel Spa Residences, Citysquare Residences,
Bellevue Hotel, Hotel Kimberly Tagaytay, Millenia Tower
and Parcvue Hotel.
Table 12: Examples of Buyers of Construction Materials in the Philippines

Local Players
GT Stoneworks is one of the premier producers of stone wall claddings based in Manila.
Currently housing an inventory of 60 distinct profiles with several colour combinations designed
to suit the needs for indoor and outdoor stone wall finishing. The finished products are used in
residential and commercial applications and have been featured as one of the most innovative
product lines in South East Asia.
To complement further its existing product lines, GT Stoneworks has introduced artificial grass
line manufactured using imported yarns from Belgium, the Netherlands and the United Kingdom.
GT’s products provide a viable alternative in finishing requirements for both indoor and outdoor
settings. Using UV protected polypropylene and polyethylene resins, its artificial grass comes in
different colours, pile heights and density to address decorative and functional needs.
Cemex is one of the leading cement producers in the Philippines, according to the Cement
Manufacturers Association of the Philippines. The company produces and markets cement and
cement products in the Philippines through direct sales using its extensive marine and land
distribution network. The company’s cement manufacturing subsidiaries have been operating in
the Philippines for over 17 years, and have well established brands, such as APO, Island and
Rizal, each with a multi-decade history in the Philippines.
Cemex offers bag cement and bulk cement, with bag cement accounting for over 80% of its
cement sales 2015, but with demand for bulk cement increasing as the number of infrastructure
projects in the Philippines grows. In 2013, Cemex began producing and selling ready-mix
concrete.
Kenneth and Mock Designs is a Filipino company that only distributes materials and technology
from Europe for the construction industry in the window and door segment. Established in 1997,
the company pioneered the industry providing the alternatives to windows in steel and aluminium.
In particular:
 Kenneth & Mock is the first company to bring the German profile leader, Kömmerling, to the
Philippine market.

 Kenneth & Mock also innovated the local window accessories market by introducing the
hidden screen system (roll-up and side-roll) and the Plissé screen from Italy using fibre-mesh
materials.
Established in 1976, Teresa Marble Corporation started its very first operation with just one air
compressor and one contractor carrying small marble blocks. Within a few years, the company
expanded its quarry in Cebu. Today, Teresa Marble Corporation is the preeminent leader in the
Philippine marble industry. Its Rizal quarry site alone, with its 7-hectare marble processing plant,
has an export capacity of 20,000 sq.m. slabs per month and 10,000 sq.m. tiles per month. As one
of the leading marble quarry owner and operator in the Philippines, the company uses
environmentally-friendly methods to produce world-class marble products.
Filtra Timber is the wood division of Philippine & Scandinavian Design, Filtra Inc., a Forest
Stewardship Council certified trading company. Filtra Timber is the Philippines’ largest importer
and distributor of premium wood species. The company supplies wood to various consuming
industries in the Philippines such as furniture and door manufacturers. The company has more
than 40 years of experience in the Philippine and international timber markets, and has well
established partners in all major timber producing countries in South East Asia.
AGC Flat Glass Philippines (AGPH) was incorporated in 1988 as joint venture between
Republic Glass Holdings Corporation of the Philippines and Asahi Glass Company, Ltd of Japan.
Its mother company, Asahi Glass Company of Japan was established in 1907 and was Japan’s
first commercial manufacturer of flat glass. Today, AGC is the world’s leader in glass, providing
innovative products and customised glazing solutions.
AGC has become a multinational company with operations centring on glass, and has a global
network of over 200 subsidiaries. The Philippine Float Plant, considered one of the most
advanced in the world, started commercial operations in 1991. The float process is a technique
that floats molten glass on top of a molten tin bath to produce distortion-free glass of superior
quality.

Entry opportunities for European construction material companies include the following:
 Iron and steel are in demand in the country, and these products were among the top ten
imports for 2015 in the Philippines, amounting to US$ 2.6 billion and registering the highest
increase among the top ten imports by 47.0 %. Steel is a popular choice for construction
projects in areas prone to earthquakes as it provides structural resilience and ductility for light
and economical structures that also meet safety and sustainability criteria. 22
 Green building materials to the Philippines. The green building industry in the country is now
growing. Currently, there is growing demand for eco-friendly and energy-saving building materials.
 Typically, products from Western countries such as the US and Europe are locally perceived
to be of good quality and with enticing and innovative designs.
 The Philippines is home to the headquarters of the Asian Development Bank (ADB), a
multilateral development bank that promotes social and economic development in Asia. ADB
regularly have procurement opportunities for their projects in the Philippines and for their sites
and projects in other countries. Usually every month of March, ADB holds the ADB Business
Opportunities Fair (ADB BOF) in their headquarters. ADB BOF is a one-stop forum for
consultants, contractors, manufacturers, and suppliers looking to provide goods and services
for ADB projects.
 As the country is one of the most disaster-prone countries in terms of natural calamities,
partnership with the government, multilateral development agencies and non-government
organisations in relief operations and risk mitigation as a means of corporate social
responsibility is one way of fostering local relationships and eventually referrals.
 Since the Philippines is prone to natural disasters such as earthquakes, typhoons and
flooding, developers usually opt for “disaster-quality” materials, which differ from cheaper
mass-produced materials produced in China or India.
22
Foreign Trade Statistics of the Philippines: 2015, Philippine Statistics Authority

European Players
Bisazza SpA
Bisazza SpA is a company from Italy that designs and produces glass mosaics. Their products
are exclusively distributed in the Philippines by iMaverick International Corporation.
Bisazza first entered the Philippine market in 1998 as a branch of Bisazza (Hong Kong) Limited
that primarily operates as a semi-processing plant and distribution point in the Far East region. In
2001, the branch was officially registered as a Philippine domestic corporation, enabling the
company to focus on the local market. Capitalizing on its global luxury brand name and
experience in the industry, Bisazza was able to popularise glass mosaic applications in the high
end segment of the tile market in the Philippines.
Arctic Forest Products, Inc.
Established in 2008 in the Philippines, Arctic-Forest Products Inc. is the exclusive Philippine
distributor of woods from Finland. These woods are certified tree-farmed, treated evergreen Scots
Pine, the most common native tree in Finland. Their timber can be used in construction works, as
structural, decorative or finishing timber like framing, panelling and flooring.
Before starting its operations, Arctic-Forest tested Finnish pinewood's quality and durability in the
country's tropical conditions, building both indoor and outdoor. Through the years, Arctic Forest
Products has provided many solutions in the Philippines to meet commercial, residential, and
furniture industry needs.
The company partners with the most trusted name in the local industry like UPM-Kymmene
Corporation, one of the world's largest timber company, and Kontiotuate Oy, manufacturer of log
houses with the biggest log house factory in the world. For local distribution, Arctic Forest
Products is also available in Wilcon Home Depots around Metro Manila
Tejas Borja
Tejas Borja is a maker of roof tiles and components which was founded in Spain in 1899. To date
they are still headquartered in Spain. In the Philippines, their clay roofing is distributed by Tejas,
Inc./ Riviera Filipina, Inc. This distributor has been in the market for over 20 years now and has

already established satellite offices outside of Manila and numerous dealers nationwide. With the
robust construction industry and consumer spending in the Philippines, the company is set to
further expand their operations in the country.

3.4 Smart and Green Building
As local developers become more aware of green building practices, demand is growing for
sustainable construction products and energy saving materials. Local building companies
are showing more interest in smart buildings, future-proof homes and energy saving innovations,
as well as supporting products such as pre-cast concrete and polyurethane foam insulation
panels.23
The green building industry in the Philippines is now in its growth stage with more than
200 buildings registered since 2006 in leading green building rating systems such as the
Leadership in Energy and Environmental Design (LEED). The landmark national development in
the industry was the launching and implementation in 2015 of the Philippine Green Building
Code, also referred to as the GB Code, by the Department of Public Works and Highways
(DPWH). The code sets mandatory regulations for all new constructions with a minimum Total
Gross Floor Area (TGFA) as in the following classification:
Use/ Occupancy Classification of Any Jurisdiction TGFA

Residential Dwelling: Condominium 20,000 sqm
Hotel / Resort 10,000 sqm
Educational: School 10,000 sqm
Institutional: Hospital 10,000 sqm
Business: Office 10,000 sqm
Mercantile: Mall 15,000 sqm
Mixed Occupancy 10,000 sqm
Table 13: Minimum Building/ Occupancy TGFA
Source: Philippine Green Building Code by the Department of Public Works and Highways (DPWH)
Aside from the GB Code, registration, precertification and certification by third-parties has
recently been becoming a trend, mostly, among high-profile buildings in the Philippines. The most
popular is the world-class LEED by the U.S. Green Building Council (USGBC). So far, LEED has:
23

 213 total registrations in the Philippines from 2006 until August 14, 2016 with an estimated
82 million gross square feet (GSF).
 50 LEED certifications awarded since 2009 with an estimated 11 million GSF. First certification
was awarded in 2009 to Texas Instruments’ assembly facility in Baguio City.
The Philippines also has locally-developed third-party green

building certifications. The Building for Ecologically Responsive
Design Excellence (BERDE) has 26 registered establishments
since its introduction in 2010 by the Philippine Green Building
Council (PhilGBC). BERDE is influenced by the standards set by
LEED, Australia’s Green Star and the British Building Research
Establishment Environmental Assessment Method (BREEAM).
The British Embassy in Manila through the UK Trade and
Investment Department partnered with PhilGBC in developing Figure 5: PhilGBC Promotes Green
Building Practices
BERDE. Aside from partnering with PhilGBC, the British Embassy
in Manila is also the only BREEAM-certified building in the Philippines which was awarded in 2010
and is the first British embassy in the world to receive an Excellent BREEAM rating. 24
The World Bank’s International Finance Corporation (IFC) also launched its own green building
rating system for emerging countries such as the Philippines. It is called EDGE (Excellence in
Design for Greater Efficiencies). They currently have 3 certifications awarded in the country
which are all new residential constructions outside of the National Capital Region (NCR). The first
two were awarded in 2015 to two developments with nearly 300 homes certified. IFC’s work in
the Philippines is done through partnership with Switzerland’s State Secretariat for Economic
Affairs (SECO) and the Philippine Green Building Initiative (PGBI).
The Philippines also has one building registered for a WELL certification by the International
Well Building Institute (USA), which pioneers measuring, certifying, and monitoring features of
buildings that impact the health and well-being of their dwellers.
24
UK embassy-Manila declared most environment-sensitive of all British embassies worldwide, 2013, bayanihan.org

Prefabricated homes have also found their way into the Philippine market as their costs are
significantly less than conventional building construction, are low wastage and environmentally
friendly. Local companies such as Revolution Pre-crafted Properties, Vazbuilt, Smarthouse
Philippines, Indigo Prefab House, Waffle Box are leading the market. Designers are finding ways
to develop premium modular homes that maintain their sustainability and affordability. With
reduced building time (it is possible to have a finished home in less than 60 days), the demand
for prefabricated homes is growing in the Philippines.
The next frontiers for green building in the Philippines are the creation of smart and green cities.
Within this context, the government launched in 2015 the US$ 14 billion Clark Green City project
in Central Luzon.25 With an area of 9,450 hectares, the project will be turned into a new city upon
its completion in 2019. At full development, the future metropolis is estimated to host 1.12 million
residents, 800,000 workers and will contribute to about 4% in the country’s gross domestic
product.26
Local Players
TREES, or Total Renewable and Energy Efficiency Solutions, is one of the leading energy
services companies in the Philippines. The company provides solutions for clients who want to
improve their financial and environmental standing, as well as offering a wide range of services
including energy audits and management and green building upgrades. TREES helps companies
to become energy efficient and to employ renewable energy sources to achieve the greatest
sustainable savings and realise greener wealth. The company offers technologies such as smart
metering, devices for energy monitoring, water recycling, air conditioning ventilation, and solar
systems and batteries. TREES is affiliated with Australian company Total Energy Solutions (TES),
which has been delivering advanced energy and water solutions to businesses for over 15 years.
Philippine Geogreen, Inc. was established to meet the construction industry's demand for
sustainable and environmentally responsible building products. The company was created after
its owners, having practiced in construction-related industries in New York City for over 10 years,
25
The Philippines plans a vast new urban centre in central Luzon, Oxford Business Group
26
Why we need Clark Green City, a new metropolis, 2016, business.inquirer.net

found that the most used green and energy saving products readily available in the US and
Europe were hard to find in the Philippines. Today the company act as distributor for three of the
best energy saving fixtures from the US. The company has served the local market with projects
in the industrial, commercial, residential, and educational industries.
Cygnet Energy And Power Asia, Inc. (Cygnet Energy) was incorporated in February, 2011 in
the Philippines. The company’s vision is to provide alternatives in energy efficiency within the
Philippines by forging collaborations with globally reputable energy-efficiency technology and
service providers. The company brings to the market proven energy-reduction solutions paving
the way to popularise the technology to large enterprises. Cygnet Energy’s portfolio includes
advanced revenue technologies and innovative solutions for electricity, gas and water.
 Rising Environmental Consciousness
 The Philippines is catching up on environmental measures. The Nielsen Global Survey on

Corporate Social Responsibility conducted in 2014 with more than 30,000 consumers in
60 countries, showed Filipinos' propensity to buy socially and environmentally responsible
brands.27 76% of the Filipinos surveyed said they bought one product or service in the past
six months because it was manufactured by a company committed to social and
environmental causes.
 As more people recognise the environmental, economic and productivity value of green
buildings, demand in the country is propelled by private customers and government
mandates on the implementation of the GB Code.
 Aside from local demand, 30% of multinational companies prefer green buildings over
traditional technologies.28 Apart from achieving resource efficiency and better health for their
employees, these companies value corporate social responsibility, thus supporting
environment-friendly initiatives. Wells Fargo, Texas Instruments, and SC Johnson &
27
Global Consumers Are Willing To Put Their Money Where Their Heart Is, 2014, Nielsen
28
30% of MNCs prefer green buildings, 2013, Business Inquirer

Johnson are some MNC's in the country that are already LEED certified following their
worldwide mandate for LEED certification.
 Technologies for energy conservation. Demand for energy is growing, brought about by the
Philippines’ economic boom and an increasingly large population. According to the
Philippines’ Energy Plan 2012-2030, energy consumption in the country will have a projected
average annual growth rate of 2.8%. It will start at 1.4% from 2011-2016 going up to 3.5% by
2025 until 2030. According to the Economic Intelligence Unit, power demand in the Philippines
is projected to outpace supply. To fill this gap, renewal energy sources and the application of
smart grid technologies are seen as possible solutions.
 Air quality technologies. Green building technologies aiming to minimise and control the entry
of pollutants into buildings are becoming more demanded in the Philippines, where air pollution
is high in urban areas.
 Technologies for water conservation. While current water supply is sufficient, the European
Chamber of Commerce of the Philippines has recently expressed concerns that urban areas
in the Philippines could be in danger of experiencing water scarcity in 2025 unless immediate
measures in improving water security are implemented. This trend creates opportunities for
companies operating in areas related to water efficiency.
 Other technologies in demand in the Philippines include energy efficient electronic products
such as building management systems, lighting, appliances, moving ramps, and energy
recovery ventilation systems. The Philippines is a tropical country where consumers and
businesses tend to make an intensive use of air conditioning. Technologies that allow making
AC systems more efficient are increasingly common in the country.
 Government funds and other initiatives to make buildings smarter and greener.
The Philippines is incentivising the use of green technologies through various efforts such as
the Renewable Energy Act that provides for fiscal incentives to renewable energy, including a
7 years income tax holiday for businesses that produce technologies in the country, a reduced
corporate tax rate, and duty-free importation of machinery, equipment and materials.29 In
29
Philippines Taxes and incentives for renewable energy, 2015, KPMG

addition, the Clean Water Act that supports duty exemption on imported capital equipment for
effective water quality management and pollution abatement.30 Similarly, the Solid Waste
Management Act includes 10-year tax and duty exemption on imported technologies used for
improving the collection of solid waste.31
European Players
Langdon & Seah
Langdon & Seah was founded in 1934 in Singapore by two British quantity surveyors. In the
following years different partners joined the company, until in 2012, Langdon & Seah merged with
Arcadis, an international consultancy, design, engineering and management services
multinational company from the Netherlands.
In the Philippines, Langdon & Seah was established in 1982 and has since evolved into a multi-
disciplinary construction and property practice company, offering a wide set of services including
LEED consultancy.
Some of their prominent green building projects in the country include:
 British Embassy in Manila. Langdon & Seah provided Full Quantity Surveying Services for the
new British Embassy in Manila, a three-storey embassy building with associated secondary
buildings set inside an approximately 1.2-hectare lot. In 2010, the embassy. achieved a
BREEAM Excellent rating, an award for green buildings.
 Zuellig Building, an office skyscraper located in the Makati Central Business District. This is a
landmark project as it is the first in the country that has achieved the most-coveted LEED
Platinum certification.
 Arya Residences is a luxurious real estate property development in Taguig City. Like the
Zuellig Building, Langdon & Seah is also the LEED Consultant & Quantity Surveyor for Arya
30
The Clean Water Act Law of the Philippines: The Use of Incentives to Promote Investments, 2010, AECEN
31
Ecological Solid Waste Management Act: Environmental Protection Through Proper Solid Waste Practice, 2013, ap.fftc.agnet.org

Residences. They achieved BERDE certification in 2013 and is already LEED Registered
aiming for Gold certification.
 The Mind Museum is the first world-class science museum in the Philippines that received a
LEED Gold certification. Like the British Embassy in Manila, Langdon & Seah also provided
Full Quantity Surveying Services for this project.
Koninklijke Philips
Philips is one of the leading European electronics companies. Philips was founded in 1891 in the
Netherlands, where the company has its headquarters today. Philips began operations in the
Philippines in 1918 and currently has workforce of approximately 120 employees. The following
are some of their recent projects in LED lighting in the Philippines:
 Seaoil is a Filipino-owned fuel company that offers fuel products ranging from automobile
gasoline to industry-specific lubricants and services such as storage and shipping. Because
its offices and service stations have high consumption of electricity, which in the Philippines is
expensive, in 2013, they partnered with Philips in installing LED lights, which has helped the
company reduce its electrical bill significantly. Additionally, these LED lights that were installed
have a service life of 14 years, meaning they will not have to be replaced for more than
10 years.
 Neltex Development Corporation is the first company in the Philippines to manufacture heavy-
metal free pipes. Neltex partnered with Philips to upgrade the lighting systems of its state-of-
the-art plant in Dasmariñas. The partnership came as the building supplier moved from Las
Piñas to Cavite. Neltex’s 26,000-sqm facility has been installed with high-quality Philips LED
lighting. From high-bay luminaires down to office space lighting, Neltex now uses energy-
efficient and environment-friendly lighting technologies.
Engie
Engie is a French multinational electric utility company, headquartered in La Défense,

Courbevoie, which operates in the fields of electricity generation and distribution, natural gas and
renewable energy.

In 2015, Engie, via its subsidiary Cofely Philippines and Cyberzone Properties Inc, formalised
their intention to pursue together, through a joint venture company, the development of a district
cooling system at Northgate Cyberzone, the Information Technology park at Alabang, Muntinlupa
City, Manila. This agreement was signed on the occasion of the visit of the French President
François Hollande to the Philippines. The project, a first in the country, consists of a centralised
chilled water plant (35 MW) supplying the 15 buildings (totalizing 390,000 sqm) owned by
Cyberzone Properties for an estimated investment of EUR 24 million. Thanks to this project, Engie
entered the energy market in the Philippines. This project is in line with the company’s
development in energy services in this area which includes the acquisition in 2014 of Keppel FMO
in Singapore and the acquisition in 2012 of the urban cooling network of Cyberjaya in Malaysia.
This project will enable to support the strategy of the Government of the Philippines for the
development of sustainable energy.

3.5 Smart Grids
According to a new report release by Northeast Group, the South East Asia region is expected to
invest US$ 24.6 billion in smart grid infrastructure between 2016 and 2026.32
Even though smart grid technology is still at an initial stage in the Philippines (the first pilot project
for smart grid was launched in 2012), the market is currently growing steadily. 33 By 2024, the
Philippines alone is set to invest US$ 2.1 billion in smart meters, distribution automation, home
energy management, information technology and other smart grid market segments. 34
The Manila Electric Company (Meralco),

the Philippines’ largest electrical power “Meralco is becoming one of the leaders
distributor, is also the leading actor in the in South East Asian in the adoption of new
local industry. technologies to improve energy service”
Matt McKenzie, general manager,

Studies revealed that in the country
Asia Pacific, GE Digital Energy
electricity prices are expensive because
electricity production relies heavily on
fossil fuels such as coal, oil and natural gas whose prices are based on international standards.
In this context, smart grid technology is seen as a fitting solution for a more efficient
consumption of energy.35 The Philippines’ Department of Energy (DOE) recently released a
circular announcing the creation of a committee that is tasked to formulate a concrete national
smart grid road map that will cover a harmonised and sustainable smart grid framework and
roadmap for the power industry until 2030. Philippine utilities and vendors are currently working
together with Philippine regulators on how to develop the smart grid sector in rural areas.
Other initiatives for the development of smart grids in the country include the SmartWire
programme, which is developed by the Electrical and Electronics Engineering Institute of the
32
Southeast Asia Smart Grid: Market Forecast, 2016, PR Newswire
33
Southeast Asia’s Smart Grid Market is Growing, 2014, Engerati
34
SE Asia seen leading smart grid infra market, 2014, Business Inquirer
35
Smart grid necessary for the Philippines, 2013, AsianPower

University of the Diliman. The initiative aims to develop hardware and software elements to be
embedded in electric transmission and distribution power lines. These technologies feature
energy harvesting, data acquisition and signal conditioning, communications capability,
computation and control for node management, communication and data processing, and an
energy efficient network protocol for accessing sensor data.36
Local Players
Manila Electric Company (Meralco). Meralco is the largest and oldest electric utility in the
Philippines. It is also one of the country’s biggest corporations and was listed in the Forbes top
companies in the world in 2015. It serves almost 5.8 million customers covering the core of the
country’s industrial, commercial, and population centres. Meralco pioneered the installation of
smart meters in the country. In 2016 Mercalco announced that it will rollout 30,000 more prepaid
meters, following an approval secured from the Energy Regulatory Commission (ERC) for the
installation of an additional 100,000 smart meters.37
ASIA Smart Grid Solutions (ASGS) was created in 2014, led by local engineers and American
personnel. ASGS Corp., in partnership with Forecasting and Planning Technologies, Inc. (FPTI)
provides data management systems empowering power distributors and end users to manage
energy resources more efficiently through the ability to identify energy consumption and diversion,
optimise transformer use, detect inefficient load control and theft and predict potential failure,
among other things, with the purpose of improving the power quality and decreasing energy
losses and costs.
WattSmart Philippines is an energy analytics and energy management company which helps
consumers save energy by providing real-time energy data, analysing of energy behaviour, and
giving recommendations for energy conservation based on the user’s historical energy
consumption. Through comprehensive energy audits, real-time energy monitoring, and energy
36
Building up ‘smart wire technology’ for the future, www.eee.upd.edu.ph
37
30,000 Meralco prepaid meters ready for installation this year, 2016, Business Mirror

consultancy, WattSmart is able to translate efficient energy management into savings for both
private companies and households. WattSmart won the IdeaSpace Startup Competition in 2014.
As a result of the existing conditions in the Philippines, EU companies are presented with the
following entry opportunities:
 Energy-efficient equipment is being increasingly demanded. The cost of electricity on the

Philippines is among this highest in Asia and the world.38 Recent studies show that a growing
number of Filipino companies are now investing in energy management solutions. A survey
conducted by Schneider Electric Philippines showed that 73% of the respondents said that
“cost savings” would be the biggest driver in pursuing such initiatives. 39 The survey also
showed that 35% of the respondents said they will increase investment in energy management
the following year. European companies should focus on this aspect of their products when
advertising.
 Local players are open to partnerships. For example, Meralco has programmed about
US$ 18 million for pilot testing on smart grid infrastructure in the Philippines. Meralco is
already running a 40,000 smart meter pilot with United States vendors General Electric,
Trilliant and Cisco, and German vendor Orga Systems.40 The facility, called Power Tech, is
being built within the Meralco Compound in Pasig City. The two-storey building will use solar
and wind energy to operate, and utilise only natural lighting and ventilation.
 The growing environmental sensibility and stricter regulations act as engines for the local
industry. Important drivers of the industry’s development in the country are the increased
drafting and implementation of regulations supporting adoption of smart grids, such as the
Green Building code. Moreover, a new environmental sensibility is emerging in the country,
creating space for demand in the Philippines.
38
The Philippine electricity market: Monopoly and competition, 2015, Business World Online
39
PH firms investing in energy management solutions, 2015, Business Inquirer
40
SE Asia seen leading smart grid infra market, Business Inquirer

European Players41
Orga Systems
Orga Systems is a software vendor for convergent charging and billing solutions with an
international customer base in telecommunications, utilities and automotive markets.
The medium-sized company is headquartered in Paderborn, Germany, and operates in 10
additional locations ranging from Istanbul to Kuala Lumpur. Orga Systems’ products provide real
time charging and billing, integrated policy control and charging, as well as order management.
In 2012 Meralco and Orga Systems teamed up on a smart-grid pilot in the Philippines, the
country’s first experience of the technology. Using Orga’s technology for smart metering
infrastructure enables Meralco to communicate with its customers in real time to notify and advise
them of consumption, thresholds, and payment issues. It also offers tiered tariffs, including
multilevel thresholds, and has the ability to remotely connect or disconnect customers. “Orga
Systems plays a crucial role in our smart grid initiative”, said Alfredo S. Panlilio, Meralco’s senior
vice president. “We chose Orga to offer real-time pricing and customer tailored prepaid energy
tariffs, underlining our continued commitment to achieve improved customer service and
satisfaction.”42
41
As the local industry is at a very initial stage of development, European smart grid companies still have to establish a solid presence in the
Philippines
42
Meralco partners with Orga Systems on Philippines smart grid, 2012, Telecom Engine

4. Regulations
4.1 General Import Procedures
As a general rule, importations into the Philippines are subject to customs duties, taxes and import
processing fees unless there is a specific legal basis for exemption. Import taxes vary from 0% to
65% according to the product. Goods imported into Philippines are subject to Value Added Tax
(VAT) at a rate of 12% calculated over the Cost, Insurance and Freight (CIF) value plus any
applicable duty.
Excise Taxes, which comprises of Specific Tax and Ad Valorem Tax (VAT), are applicable on
goods manufactured in the country as well as goods imported. Excise taxes, both specific and
VAT, are levied on:
 wines and spirits, beer
 cigarettes and tobacco products
 lubricating oils and grease
 processed gas
 waxes
 denatured alcohol
 cinematographic films
 coal
 cars, non-essential goods
 mineral products
 naphtha and other similar products of distillation
 asphalt and petroleum and other fuel products

VAT Exemptions
Companies that register with the Board of Investment (BOI) may quality for a number of
incentives. For example, BOI registered enterprises with bonded manufacturing warehouses
enjoy exemption from customs duties and national internal revenue taxes on importation of
required supplies / spare parts. In addition, they will be given a 10-year period to avail exemption
from wharfage dues and any export tax, impost and fees on non-traditional export products.
BOI registered enterprises may also import machinery, equipment, spare parts and accessories
subject to zero percent duty. Furthermore, Philippines also allows tax exemption on breeding
stocks and genetic materials within 10 years (tax credit of 100%) as well as tax credit on raw
materials and supplies.

4.2 Marking and Labelling Requirements
Marking and labelling requirements are specified in the Consumer Act of the Philippines (Republic
Act No. 7394) and Philippine National Standards (PNS). The Department of Trade and Industry
(DTI)’s Bureau of Philippine Standards (BPS) is the national standards body that develops and
implements the PNS.43
All consumer products domestically sold, whether manufactured locally or imported shall indicate
in its packaging the following minimum labelling requirements:
 Correct and registered trade name or brand name
 Registered trademark
 Registered business name and address of the manufacturer, importer, or repacker of the
consumer product in the Philippines
 General make or active ingredients
 Net quality of contents, in terms of weight
 Country of manufacture, if imported
The BPS implements a product certification mark scheme to verify conformity of products to PNS
and other international standards. This includes critical products such as construction and building
materials. Products manufactured locally must bear a Philippine Standard (PS) mark, while
imported products must bear Import Commodity Clearance (ICC) certification marks.
43
Philippines - Labelling/Marking Requirements, 2016, International Trade Administration

4.3 Rules and Regulations for Construction Activities and Machinery
The National Building Code of the Philippines provides a framework for minimum standards for
all buildings and constructions by setting requirements to control and regulate their location, site,
design, quality of materials, construction, use occupancy, and maintenance. Buildings and
structures constructed before the approval of the code are not affected except when alterations,
conversions, additions, or repairs are to be made, in which case the code applies only to the
portions to be altered, added, converted, or repaired. Traditional indigenous buildings are
exempted. The full National Building Code of the Philippines can be accessed by following this
link: www.gov.ph/downloads/1977/02feb/19770219-PD-1096-FM.pdf
In the Philippines, all heavy equipment operators assigned at the project site must be tested and
certified in accordance with a standard test prescribed by Technical Education and Skills
Development Authority (TESDA) in coordination with accredited organizations. Moreover, all
heavy equipment must be tested and certified in accordance with the standards prepared by the
Department of Labour and Employment or its recognized organization/s prior to commissioning
of said equipment.

4.4 Philippine Green Building (GB) Code
The GB Code, a Referral Code of the National Building Code (Presidential Decree No. 1096) was
launched in June 2015 by the Department of Public Works and Highways (DPWH), with the
assistance of the World Bank-IFC, and the technical support of the Philippine Green Building
Initiative (PGBI). The latter is composed of accredited professional organisations in the building
industry.
The Code seeks to improve the efficiency of building performance through a framework of
standards that promotes sound environmental and resource management to counter harmful
gases, throughout the building’s life cycle, including efficient use of materials, site selection,
planning, design, construction, use, occupancy, operation and maintenance, without significant
increase in cost.
The general provisions of the Code provide for the protection of the people from the harmful
effects of climate change. The Code seeks to improve the efficiency of building performance
through a framework of standards that will enhance sound environmental and resource
management to counter harmful gases throughout the building’s life cycle, including efficient use
of materials, site selection, planning, design, construction, use, occupancy, operation and
maintenance, without significant increase in cost.
The GB Code adopts a staggered or incremental approach and is subject to periodic review of
the DPWH secretary through the National Building Code Development Office to modify or include
new aspects and emerging efficient technologies and to expand the coverage to other building
use/occupancy, or to replace outmoded measures.

For a start, the GB Code will apply to all new construction and/or with alteration of buildings with
a minimum total gross floor area (TGFA) as follows:
Use/ Occupancy Classification of Any Jurisdiction TGFA

Residential Dwelling: Condominium 20,000 sqm
Hotel / Resort 10,000 sqm
Educational: School 10,000 sqm
Institutional: Hospital 10,000 sqm
Business: Office 10,000 sqm
Mercantile: Mall 15,000 sqm
Mixed Occupancy 10,000 sqm
Figure 6 Minimum Building/ Occupancy TGFA
Source: Philippine Green Building Code by the Department of Public Works and Highways (DPWH)
Buildings and structures constructed before the approval of the code are not affected except when
alterations, conversions, additions, or repairs are to be made, in which case the code applies only
to the portions to be altered, added, converted, or repaired.
When alterations, additions, conversions and renovations of existing buildings are made,
the whole building shall be subject to the applicable provisions of the GB Code.
The following are some of the provisions of the Code:
 The required wall-to-window ratio needs to be balanced with the amount of daylight coming
through the glazed area.
 Solar heat gain coefficient or SHGC will be determined by dividing the amount of solar heat
passing through the glass by the total solar radiation incident on the glass.
 Visible light transmittance (VLT) will be used to determine the amount of light transmitted
through the glass.
 Natural ventilation to ensure free cooling and fresh air will be provided by the computation of
size of operable window openings to floor area of at least 10 %.

 Roof insulation will be a priority, and in amounts corresponding to the roof colour. White roofs
have a solar reflectance index (SRI) of 92, while dark colours have an SRI of 0-33.
 Mechanical systems, especially the cooling systems or chillers of large buildings, will have to
meet minimum efficiency requirements.
 Efficient water fixtures will be used to comply with maximum water flow rates of different
fixtures. Rainwater harvesting from roofs and hardscape is a must for non-potable use.
 Nontoxic building materials are those without hazardous effects on building occupants.
They will be checked for volatile organic compounds or VOCs, which should be within tolerable
levels.
 A materials recovery facility will be required for the collection and segregation of solid waste.
Hospitals will be required to have isolated bins for hazardous wastes.
 Indoor environmental quality standards will require strict adoption of efficient design and
operation practices to protect building occupants’ health, productivity and safety.

4.5 Government Tenders
As the Philippines commits to transparency for its public tenders, all procurement, regardless of
cost, shall be conducted through competitive bidding. To this aim, the PhilGEPS was created.
The PhilGEPS is the single, centralised electronic portal that serves as the primary and definitive
source of information on government procurement.
Government agencies, as well as suppliers, contractors, manufacturers, distributors and

consultants, are mandated to register and use the system in the conduct of procurement of goods,
civil works and consulting services. All government agencies are required to post the following in
the PhilGEPS Electronic Bulletin Board:
 Invitation to Bid and all notices of other procurement opportunities
 Supplemental / Bid bulletins
 Contract awards, the corresponding notices of award, including the reasons for award of
contract
 Results of bidding and related information
 Other notices, announcements, information for interested parties
 Bid matching of procurement opportunities with appropriate PhilGEPS registered suppliers is

being done automatically by the system once a government buyer posts an opportunity.
PhilGEPS includes a list of common-use goods, supplies, materials and equipment called
Electronic Catalogue. Through the use of the PhilGEPS, transparency in government
procurement is enhanced since opportunities to trade with government and the ensuing
transactions are provided online. PhilGEPS can be accessed here: www.philgeps.gov.ph
As a general rule, eligible bidders should be at least 60% Filipino Equity. The exception however
is that foreign bidders are eligible to participate when provided for under treaty or international
agreement; when the goods sought to be procured are not available from local suppliers; or when
there is a need to prevent situations that defeat competition or restrain trade.

5. Annex
5.1 List of Useful Contacts
Construction Industry Authority of the Philippines (CIAP)

5F Executive Building Center
369 Sen. Gil J. Puyat Ave, Makati
1209 Metro Manila
Tel: (+632) 895.4424
Fax: (+632) 897.9336
Email: ciap@dti.gov.ph
Website: ciap.dti.gov.ph
The Philippine Constructors Association (PCA)

3/F Padilla Bldg., Francisco Ortigas Jr. Avenue
Ortigas Center
Pasig City, 1605
Tel: (632) 631-2778
Fax: (632) 631-2788
Email: info@philconstruct.com
Website: www.philconstruct.com
Philippine Green Building Council

Unit G-4B, The NET One Center, 26th Street corner 3rd Avenue
Bonifacio Global City
Taguig City 1634
Tel: +63 2 815 9301
Fax: +63 2 858 8082
Email: secretariat@philgbc.org
Website: philgbc.org
Department of Public Works and Highways (DPWH)

Bonifacio Drive,
Port Area, Manila
Tel: 304-3300
Fax: 304-3020
Email: singson.rogelio@dpwh.gov.ph
Website: www.dpwh.gov.ph/dpwh

Department of Energy (DOE)
Energy Center, Rizal Drive
Taguig City, 1632
Tel: 840-2134
Fax: 812-6194
Email: sec@doe.gov.ph
Website: www.doe.gov.ph
Board of Investments (BOI)

Ground Floor Industry and Investments
Bldg 385 Sen. Gil Puyat Ave
Makati City
Tel: 895.36.40
Fax: 895.83.22
Email: bossac@boi.gov.ph
Website: investphilippines.gov.ph
European Chamber of Commerce of the Philippines (ECCP)

19/F Philippine AXA Life Centre
Sen. Gil Puyat Avenue corner Tindalo Street,
San Antonio, Makati City, Metro Manila, 1200
Tel: (+632) 845.1324
Fax: (+632) 845.1395
Email: visayas@eccp.com
Website:www.eccp.com
Philippine Economic Zone Authority (PEZA)

Building 5, DOE-PNOC Complex
Energy Center, Rizal Drive
Taguig City, Metro Manila, 1634
Tel: 551-3438
Fax: 551-3436
Email: info@peza.gov.ph
Website: www.peza.gov.ph

5.2 Starting a Business in the Philippines
Why the Philippines?
The Philippines has emerged as an attractive market for foreign companies due to its strong
economic, democratic and demographic fundamentals. Moreover, the country, with its strategic
location, is a gateway to the dynamic Asian market.
Registering your business
The SEC, the Securities and Exchange Commission, is the government agency responsible for
the registration, licensing, regulation, and supervision of all corporations and partnerships
organised in the Philippines, including foreign corporations licensed to engage in business or to
establish branch offices in the Philippines. Registration with the SEC grants the entity with the
corporate franchise or juridical personality to operate and transact business in the Philippines.
The processing and approval of the papers generally take around 15 working days from official
acceptance of the application.
A majority of the directors must be residents of the Philippines. The number of directors must be
at least five but not more than 15. Hence, if there are five directors, at least three must be
residents.
At least 25% of the authorised capital stock of a domestic corporation must be subscribed and at
least 25% of the subscription must be paid. However, subscriptions by alien individuals or foreign
entities must generally be fully paid, except in cases where the law provides for the specific
amount of paid-up capital.
Government Agencies
The government of the Philippines provides support and assistance to help businesses grow in
the country. European companies looking to set up, operate and establish a business in the
Philippines will find it easier with assistance from the following government agencies:

 The Philippine Board of Investments (BOI), an attached agency of Department of Trade and
Industry (DTI), is the lead government agency responsible for the promotion of investments in
the Philippines. Taking the lead in the promotion of investments, BOI assists Filipino and
foreign investors to venture and prosper in desirable areas of economic activities. The BOI
assists businesses with the following services:
 Advisory, Actualisation and Aftercare
 Industry Updates and Information
 Marketing & Promotions
 Incentives
 Policy Advocacy
 The Philippine Economic Zone Authority (PEZA) is attached to the Department of Trade and
Industry and is tasked to promote investments, extend assistance, register, grant incentives
to and facilitate the business operations of investors in export-oriented manufacturing and
service facilities inside selected areas throughout the country. It oversees and administers
incentives to developers/operators of and locators in world-class, ready-to-occupy,
environmentally-friendly, secured and competitively priced Special Economic Zones.
Business Locations
The urban centres of Metro Manila, Metro Cebu, and Davao City, as well as the government-
owned and private special economic zones, are magnets of economic activities. The Philippine
Assistance Program is helping in the acceleration of regional development by sponsoring projects
in Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon Provinces), Iloilo, Samar, the Iligan-
Cagayan de Oro corridor, and General Santos. The Calabarzon Project has resulted in the
proliferation of privately-owned industrial estates to address the needs of foreign investors.
The Subic Naval Base in Olongapo City, the Clark Air Base in Angeles City, and other former US
military bases with excellent infrastructure were converted into special economic zones. The

Bases Conversion Development Authority succeeded in taking over these installations and
implementing its master plans for these areas.
Investors’ interest in these areas has been tremendous and is perceived to be sustainable over
the next five to ten years. The main factors for increased investors’ interest in these areas include
fiscal incentives, full administration support for the development of these areas, strategic location,
and excellent infrastructure, particularly the presence of an excellent harbour and international
airports that meet global standards in both Subic and Clark.
Recently, the government has taken significant strides in promoting the country as an attractive
information technology destination. As of January 2015, there are 209 IT Parks and Centres which
have been proclaimed as IT Ecozones by the President of the Philippines and are now registered
with PEZA.
In 2007, the government embarked on the actual implementation of its project on “industry
clustering”. Clustering is the geographic concentrations of interconnected business entities and
support institutions, and encompasses an array of linked industries and other entities important
to competition. These may include suppliers of inputs, support facilities and service providers,
and providers of specialised infrastructures.
The model industry clusters are: Vegetable Industry Cluster of Northern Mindanao - Model
Regional Cluster and One-Town-One-Product (OTOP) Award; Bottled Sardines of Dipolog,
Zamboanga del Norte - Model Provincial Cluster and OTOP Award; Furniture of Cebu - Model
Provincial Cluster; Food Processing of CARAGA - Model Regional Cluster; and the eight industry
clusters of the Davao - Emerging cluster.
In view of the success of industry clusters in improving competitiveness of products and services
in the regions, the National Industry Cluster Capacity Enhancement Project (NICCEP) was
launched in 2012. The NICCEP is a three-year project funded by the Japan International
Cooperation Agency and implemented by the Department of Trade and Industry. It employs the
industry cluster approach to support Micro-Small and Medium Enterprises (MSME), and fosters
inter-enterprise linkages among MSMEs.

Finding a Distributor in the Philippines
An agent or distributor arrangement is the most common method in entering the Philippine market.
Partnering with a local business is also recommended, as entering the Philippine market presents
some challenges to foreign companies. This is due in part to a limited number of family-owned
conglomerates that dominate key sectors and, in some cases, create high barriers to entry.
Philippines-based trade associations, chambers of commerce, and foreign commercial offices

within EU Member State embassies are all good places to start the search for a distributor in the
country. International business consultants with experience in helping foreign companies can also
prove invaluable by facilitating introductions to qualified distributors. It is always best to meet a
prospective distributor in person, and to check references.

5.3 Useful Statistics
Exporters Imported value Imported value Imported value Imported value Imported value
in 2012 in 2013 in 2014 in 2015 in 2016
World
267,416 291,813 204,990 272,642 452,584
Viet Nam
43,123 68,653 55,773 90,092 167,926
China
28,841 42,773 23,036 29,107 73,456
Taipei, Chinese
3,672 2,610 4,858 11,715 57,024
Thailand
17,037 15,586 22,398 38,291 33,347
Korea, Republic of
11,240 33,932 38,274 35,059 30,564
Japan
6,760 6,874 12,028 13,855 30,420
Australia
20,320 15,773 19,098 21,647 30,313
Malaysia
30,638 36,370 15,309 4,480 7,342
Indonesia
2,956 1,085 1,596 10,883 4,954
Table 14: Imports of earths and stone; plastering materials, lime and cement into the Philippines
Source: COMTRADE
Unit: US Dollar thousand
Importers Exported value Exported value Exported value Exported value Exported value
in 2012 in 2013 in 2014 in 2015 in 2016
World
27,365 25,803 26,574 21,675 15,375
China
2,924 3,795 2,726 7,655 4,366
Taipei, Chinese
6,831 6,909 6,572 3,564 2,939
Japan
4,127 3,889 3,524 1,596 2,225
Micronesia,
Federated States of 668 1,785 1,471 1,574 1,928
Malaysia
471 159 1,906 582 994
Korea, Republic of
702 354 415 289 421
Hong Kong, China
1,022 90 103 355 314
United States Minor
Outlying Islands 395 - 12 36 308
United States of
America 177 758 27 287 249
Table 15: Exports of earths and stone; plastering materials, lime and cement from the Philippines
Source: COMTRADE

in 2012 in 2013 in 2014 in 2015 in 2016
World
315,441 357,656 396,738 403,433 561,014
China
41,654 77,777 137,620 154,101 188,944
Canada
55,800 69,842 73,675 71,790 121,737
Malaysia
104,813 97,654 84,453 69,498 89,902
Japan
16,445 11,071 11,666 21,997 59,241
New Zealand
8,775 8,263 9,014 10,891 16,241
United States of
America 26,329 21,255 22,861 14,984 16,193
Thailand
7,498 8,015 10,077 12,788 10,372
Germany
7,632 14,016 8,328 7,266 9,392
Solomon Islands
3,210 9,205 1,023 5,374 6,729
Table 16: Imports of Wood and articles of wood; wood charcoal into the Philippines
Source: COMTRADE
in 2012 in 2013 in 2014 in 2015 in 2016
World
2,245,920 3,229,270 3,095,973 2,907,309 2,875,027
Japan
2,166,980 3,095,740 2,975,258 2,810,965 2,781,965
China
38,824 63,944 56,122 30,941 26,753
Singapore
2,393 4,978 4,573 1,464 23,014
United States of
America 13,356 19,604 14,738 23,716 17,245
Afghanistan
- - 86 1 3,337
Belgium
1,389 1,154 1,036 3,652 2,528
France
2,694 3,604 3,399 4,092 2,480
Korea, Republic of
3,999 6,610 4,160 1,539 2,228
United Kingdom
605 798 1,103 1,342 1,788
Table 17: Exports of Wood and articles of wood; wood charcoal from the Philippines
Source: COMTRADE

in 2012 in 2013 in 2014 in 2015 in 2016
World
143,894 143,261 160,582 174,812 244,756
China
56,466 51,938 56,421 65,676 86,124
Thailand
24,473 29,531 46,432 49,663 56,789
Japan
8,467 7,101 7,206 7,005 26,664
Malaysia
8,149 6,396 5,871 10,910 24,293
Korea, Republic of
2,357 5,927 4,166 5,434 9,893
Indonesia
4,664 2,627 3,678 2,853 8,104
United States of
America 5,560 7,001 5,088 4,430 6,019
Taipei, Chinese
5,292 6,530 4,950 7,152 4,930
Italy
2,397 2,779 4,710 3,606 3,504
Table 18: Imports of Articles of stone, plaster, cement, asbestos, mica or similar materials into the Philippines
Source: COMTRADE
in 2012 in 2013 in 2014 in 2015 in 2016
World
56,215 70,840 65,506 51,923 65,269
India
5,754 6,884 8,239 8,728 24,554
Japan
6,314 7,226 7,110 6,118 9,193
United States of
America 17,614 29,238 19,506 10,709 7,960
Korea, Republic of
1,970 1,278 3,019 1,875 2,705
Taipei, Chinese
3,385 3,390 3,996 3,008 2,494
Viet Nam
1,064 1,079 1,258 1,405 2,110
Malaysia
2,312 2,103 2,976 3,184 1,788
Peru
908 1,434 1,431 1,673 1,554
United Arab
Emirates 1,172 846 1,982 1,602 1,439
Table 19: Exports of Articles of stone, plaster, cement, asbestos, mica or similar materials from the Philippines
Source: COMTRADE

in 2012 in 2013 in 2014 in 2015 in 2016
World
219,278 263,142 330,425 411,889 423,000
China
153,667 193,469 242,462 317,121 333,517
Indonesia
9,817 10,305 11,696 13,561 15,494
Viet Nam
7,396 10,331 17,783 19,770 12,984
Thailand
12,545 12,953 14,410 12,853 10,162
Spain
9,139 8,621 9,510 9,527 8,216
Taipei, Chinese
3,080 3,175 2,906 11,885 7,847
Japan
6,129 3,485 4,501 3,229 7,089
Italy
2,631 4,777 6,392 6,665 5,844
India
245 636 1,785 1,172 4,932
Table 20: Imports of Ceramic products into the Philippines
Source: COMTRADE
in 2012 in 2013 in 2014 in 2015 in 2016
World
20,357 20,105 29,510 26,041 27,434
Japan
6,054 6,884 14,199 9,030 11,186
United States of
America 5,971 6,113 5,399 6,509 8,697
Taipei, Chinese
1,118 204 2,137 2,204 2,214
Korea, Republic of
636 380 912 945 1,198
United Kingdom
310 263 697 737 701
Indonesia
1,322 1,377 553 520 639
Australia
540 450 565 774 372
Kuwait
20 56 15 61 285
United Arab
Emirates 134 87 133 97 267
Table 21: Exports of Ceramic products from the Philippines
Source: COMTRADE

in 2012 in 2013 in 2014 in 2015 in 2016
World
159,255 180,484 205,762 240,357 282,100
China
66,390 91,986 119,135 139,240 161,487
Japan
14,993 9,757 8,677 14,317 22,663
Indonesia
19,630 18,907 24,663 22,475 15,388
Viet Nam
3,786 10,695 7,065 4,586 12,856
Taipei, Chinese
5,192 7,740 6,089 5,196 9,605
Thailand
6,832 8,998 12,488 9,981 9,334
United Arab
Emirates 4,640 6,121 3,862 4,211 7,497
United States of
America 2,830 2,336 2,452 5,183 6,189
Hong Kong, China
2,407 2,388 1,922 2,084 5,527
Table 22: Imports of Glass and glassware into the Philippines
Source: COMTRADE
in 2012 in 2013 in 2014 in 2015 in 2016
World
50,407 93,148 124,713 79,379 46,138
Japan
14,340 16,058 19,620 11,704 12,783
Australia
8,431 9,621 10,614 17,640 6,274
United States of
America 3,200 11,864 15,849 11,976 3,958
Hong Kong, China
460 14,197 30,649 7,905 3,604
Korea, Republic of
6,951 3,837 2,234 1,899 3,405
Indonesia
1,475 2,062 2,454 2,775 2,979
Singapore
1,475 13,772 15,411 3,314 2,221
Viet Nam
3,095 948 1,655 1,700 2,040
Thailand
1,461 1,520 3,701 4,902 1,770
Table 23: Exports of Glass and glassware from the Philippines
Source: COMTRADE

Exporters Imported value in Imported value in Imported value in Imported value in Imported value in
2012 2013 2014 2015 2016
World
1,293,339 1,372,644 1,672,304 1,719,439 3,037,090
China
327,270 463,628 845,375 1,014,169 2,155,368
Japan
444,488 384,973 383,804 305,842 397,962
Taipei, Chinese
124,257 146,849 161,816 146,482 200,610
Korea, Republic
of 152,198 155,201 114,129 100,513 125,529
Russian
Federation 66,523 51,084 13,938 35,994 53,705
Thailand
29,964 30,869 21,521 23,875 17,412
India
11,306 12,996 13,529 11,481 16,598
Viet Nam
27,291 33,346 56,345 8,684 11,208
Malaysia
30,102 8,611 6,242 4,723 9,812
Table 24 Imports of Iron and steel into the Philippines
Source: COMTRADE
Importers Exported value in Exported value in Exported value in Exported value in Exported value in
2012 2013 2014 2015 2016
World
106,251 112,836 137,088 74,163 78,114
Japan
16,806 14,378 8,052 4,875 15,336
Taipei, Chinese
12,191 9,528 24,271 9,713 11,102
Viet Nam
1,608 10,673 15,403 11,542 10,827
Korea, Republic
of 18,446 33,366 28,323 12,788 10,578
China
14,958 15,066 8,943 3,962 6,236
India
1,063 1,649 620 2,841 5,635
Thailand
7,707 9,158 8,086 7,640 3,865
Indonesia
3,518 5,879 21,098 4,262 3,443
Bangladesh
864 1,193 1,440 3,592 2,390
Table 25: Exports of Iron and steel from the Philippines
Source: COMTRADE

5.4 Bibliography
30% of MNCs prefer green buildings, 2013, Business Inquirer
30,000 Meralco prepaid meters ready for installation this year, 2016, Business Mirror
Building up ‘smart wire technology’ for the future, www.eee.upd.edu.ph
Ecological Solid Waste Management Act: Environmental Protection Through Proper Solid
Waste Practice, 2013, ap.fftc.agnet.org
E-commerce seen as major growth driver by 2020, 2016, The Manila Times
Equipment firm sees robust sales growth, 2015, Manilastandard.com
European Commission, Trade, The Philippines, ec.europa.eu
Export growth continues on a strong trajectory in the Philippines, Oxford Business Group
Foreign Trade Statistics of the Philippines: 2015, Philippine Statistics Authority
Global Consumers Are Willing To Put Their Money Where Their Heart Is, 2014, Nielsen
Heavy equipment trader eyes market leadership in 5 years, Philstar
Infrastructure Projects Fuelling the Growth of Construction Equipment Market in South-East

Asia Region, 2016, 6Wresearch
Meralco partners with Orga Systems on Philippines smart grid, 2012, Telecom Engine
PH firms investing in energy management solutions, 2015, Business Inquirer
Philippine construction works seen growing, 2016, philstar.com
Philippine Trade and Investment, 2015, jakartape.dfa.gov.ph
Philippines - Labelling/Marking Requirements, 2016, International Trade Administration
Philippines' back office shines in 2015, exceeds targets, www.rappler.com
Philippines Excavator Market Forecast to 2020, 2016, PRNewswire

Philippines HVAC 2016, 2016, Global Information
Philippines readying 'hundreds' of infrastructure projects, 2016 Nikkei Asian Review
Philippines Taxes and incentives for renewable energy, 2015, KPMG
Philippines Top 10 Imports, 2016, www.worldstopexports.com
Positive Economic Outlook for the Philippines as Exports and Imports See Strong Growth,
ASEAN Briefing
SE Asia seen leading smart grid infra market, 2014, Business Inquirer
SE Asia seen leading smart grid infra market, Business Inquirer
Smart grid necessary for the Philippines, 2013, AsianPower
Southeast Asia Smart Grid: Market Forecast, 2016, PR Newswire
Southeast Asia’s Smart Grid Market is Growing, 2014, Engerati
The Clean Water Act Law of the Philippines: The Use of Incentives to Promote Investments,
2010, AECEN
The Philippine electricity market: Monopoly and competition, 2015, Business World Online
The Philippines' bustling economy leading to a series of developments in the construction

sector, Oxford Business Group
The Philippines plans a vast new urban centre in central Luzon, Oxford Business Group
Trillion-Dollar Philippine Economic Goldmine Emerging From Murky Pit, 2015 Forbes Asia
UK embassy-Manila declared most environment-sensitive of all British embassies worldwide,

2013, bayanihan.org
Why we need Clark Green City, a new metropolis, 2016, business.inquirer.net

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Construction & Building Technologies

Philippines Market Study

Photo by Benson Kua, distributed under CC licence BY-SA 2.0.

Central Management Unit

Philippines Market Study

Submitted to the European Commission by

Construction & Building Technologies – Philippines Market Study - Page 3 of 90

1. EXECUTIVE SUMMARY ......................................................................................................................................... 9

2. WHAT ARE THE CHARACTERISTICS OF THE PHILIPPINES? ........................................................................ 13

3. MARKET OVERVIEW & EU ENTRY OPPORTUNITIES IN THE PHILIPPINES ................................................. 20

Construction & Building Technologies - Philippines Market Study - Page 4 of 90

Construction & Building Technologies - Philippines Market Study - Page 5 of 90

Figure 1: Map of the Philippines ................................................................................................. 13

Table 1: Ease of Doing Business in Singapore .......................................................................... 18

Construction & Building Technologies - Philippines Market Study - Page 6 of 90

ASEAN Association of Southeast Asian Nations

BOI Board of Investments

BPO Business process outsourcing

BPS Bureau of Philippine Standards

CAGR Compound annual growth rate

CBT Construction & Building Technology

CIAP Construction Industry Authority of the Philippines

CIF Cost, Insurance and Freight

DENR Department of Environment and Natural Resources

DPWH Department of Public Works and Highways

FTA Free-trade agreement

GB Code Green Building Code

GDP Gross Domestic Product

GNI Gross National Income

GSF Gross square feet

HVAC Heating, ventilation and air conditioning

ICT Information and communications technology

IFC International Finance Corporation

LED Light-emitting diode

LEED Leadership in Energy and Environmental Design

Meralco Manila Electric Company

Construction & Building Technologies - Philippines Market Study - Page 7 of 90

MSME Micro-Small and Medium Enterprises

NCR National Capital Region

NICCEP National Industry Cluster Capacity Enhancement Project

PCA Philippine Constructors Association

PEZA Philippine Economic Zone Authority

PNS Philippine National Standards

SEC Securities and Exchange Commission,

SHGC Solar heat gain coefficient

SRI Solar reflectance index

TESDA Technical Education and Skills Development Authority

TGFA Total Gross Floor Area

TPP Trans Pacific Partnership

UNDP United Nations Development Programme

USGBC U.S. Green Building Council

VAT Value Added Tax

VLT Visible light transmittance

VOC Volatile organic compounds

WEF World Economic Forum

Construction & Building Technologies - Philippines Market Study - Page 8 of 90

Construction & Building Technologies - Philippines Market Study - Page 9 of 90

Building Materials and Building Installation

Smart and Green Building

Construction & Building Technologies - Philippines Market Study - Page 10 of 90

Growth of Mining and Construction Activities

Machines and Materials Resistant to Natural Disasters

Energy Saving Technologies